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Session Recap: USD retreats in eventful session

FXStreet (Córdoba) - A quite eventful session in Europe with the Scottish referendum taking center stage. The European Central Bank allotted its first TLTRO with take-up below expectations while investors still digest Federal Reserve decision. Rate decisions have also been announced by the Swiss National Bank and the Norges Bank today.

GBP/USD vulnerable amid Scottish jitters

Although latest polls gave the ‘no’ the lead, the threat of a break up of the UK is keeping the pound vulnerable. GBP/USD is trading in a slim range just above 1.6300 as investors remain sidelined ahead of the vote results. The Scottish vote ends at 21:00 GMT but the unofficial estimated time of the result is around 7:00 GMT on Friday.

EUR/USD and the TLTRO results

The ECB allotted EUR 82.6 billion at its first 4-year TLTRO against expectations around EUR 110 - 150 billion take up. Recall, this is the program announced in June that provides loans at low rates to banks at a long maturity on condition they pass them on to the real economy. The program is aimed to combat deflation via expansion of the ECB balance sheet. A second TLTRO is scheduled for December 11.

EUR/USD turned lower and slid back to the 1.2870 zone after the TLTRO results, also weighed by rumours of a possible French downgrade by Moody’s. At time of writing, EUR/USD is trading at 1.2878, up 0.11% on the day. The euro hit a fresh 14-month low of 1.2834 in the wake of Fed decision.

CHF and the SNB decision

CHF strengthened after the SNB kept rates unchanged at 0.0%-0.25% after speculations that negative interest rates might be announced.

Elsewhere, USD/JPY pulled back from a 6-year high of 108.86. The Australian dollar was little changed near multi-month lows versus the greenback while CAD and NZD managed to trim yesterday’s losses. European stocks were broadly higher while US futures pointed for a higher opening.

During the New York session watch for US housing starts and building permits, initial jobless claims and the Philadelphia Fed manufacturing survey.

Main Headlines in Europe:

BoJ's Kuroda: Easing plan to be continued until 2% inflation target reached

Gold recovers ground after hitting 8 ½-month low

What’s the sentiment around EUR/USD today? – Commerzbank and OCBC Bank

SNB keeps minimum exchange rate unchanged in September

Norway Norges Bank Interest Rate Decision unchanged at 1.5%

UK: Annual Retail Sales up 3.9% in August, below expectations

European stocks rise, all eyes on Scotland

First TLTRO take-up disappointing at only €82.6B

SNB's Jordan: Scottish vote source of new insecurity

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