USD traded near a three-week high Monday supported by liquidation pressures ahead of Tuesday's FOMC meeting and by fresh safe haven demand as equities, oil and gold prices decline. The FOMC meet Tuesday and Wednesday. There is speculation that the FOMC may begin to signal a withdrawal of stimulus and possibly take a hawkish bias as recent US economic data points to end of the recession. If the FOMC sets the stage for an end to the Fed's easing cycle the USD may experience further gains. Global equity markets were pressured by concern that the current rally from the March lows may be overdone with many analysts comparing the rally to bear market rallies in the 1930s to the 1970s. These rallies failed to hold. Crude oil prices were pressured by concern about weaker global demand and gold traded below $1000 an once in reaction to a report that the IMF will sell 12.5% of its gold holdings. Focus turns to tomorrow's start of the two day FOMC policy meeting and the G-20 meeting on September 24th and 25th. The trade will be looking to see whether the Fed signals an end of its easing cycle and the beginning of withdrawal of stimulus. The G-20 is expected to focus on new global regulation for financial markets and president Obama says he will push the G-20 leaders for a reshaping of the global economy. CFTC commitment of traders for the IMM last week showed that speculators raised short USD and ripe for a technical rebound. The USD bear camp is quite crowded. USD gains were limited as equities erase early losses.

Today's US data: Two day FOMC meeting will begin on September 22nd. On September 24th initial jobless claims for week of 9/19 will be released expected at 540k compared to 545k last month. On September 24th August existing home sales will be released expected at 5300k compared to 5240k last month. On September 25th August durable goods will be released expected at 1.1% compared to 5.1% last month along with final University of Michigan sentiment for expected unchanged at 70.2%. August new home sales will also be released on September 25th expected 450k compared to 433k last month.

Source: Easy-Forex