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Trending Economic: Afternoon Brief [28 October 15]

AUD is the top loser in the G10 currencies following a below expected Q3 CPI data. At the time of writing AUSUSD was down 0.8% for the day as speculations over the RBA cutting rates at the policy meeting on Tuesday next week gathered steam. At the moment markets are partially pricing in a 25bp rate cut at the meeting and hence further AUD downside is expected if a rate cut occur. RBNZ policy meeting is also due today at 2000 GMT with consensus of no change, however, NZDUSD has dipped in anticipation of a possible RBNZ surprise, now 2nd weakest G10 currencies. 

SEK has strengthen following the Riksbank meeting as markets expected a slight cut in the repo rate which was left unchanged at a negative 0.35%. And even though the QE was expanded to by SEK 65bln to SEK 200bn by June 2016, SEK is now the top G10 gainer. Elsewhere, Norway’s September retail sales dipped by 0.8% from a month earlier and the unemployment rate rose to 4.6% from an earlier 4.3%. As a result NOKSEK is now among the weakest currency pair in the G10. 

In terms of USD the most important release remains the FOMC statement at 1800 GMT. We expect a slight dovish statement but expect the December rate hike to remain a possibility. In this scenario we expect USD to remain choppy before markets turn their focus to Advance US Q3 GDP on Thursday. So far today USD is up vs. AUD, NZD & NOK & down vs. EUR, CHF & SEK.