It’s been another quiet night in FX market today with most of the majors contained to 30 pip ranges. The one exception was the high yielder commodity dollars which saw a steady rise in Asian and early European trade in the wake of yesterday’s FOMC minutes.

Although the FOMC minutes essentially reaffirmed that the Fed was on the path to hike rates in December, they also showed that there was a wide range of opinions amongst the members with many still concerned about the lack of inflation in US economy. The net takeaway for the FX market was that the overall tightening path of US policy is likely to be much less aggressive, especially if as some members argued, disinflation is a secular rather than a cyclical phenomenon.

The shift in sentiment helped spur some buying of high yielders as both Aussie and kiwi rose in Asian trade with the former popping all the way to .7836 before finding some resistance. The AUDUSD was also helped by better home loan data and higher readings on inflation expectations.

Nevertheless, the rise in commdollars remains a short covering rally within a broader downtrend and if today’s US PPI data proves hotter than forecast, they may give up some of their overnight gains as US yields are likely to improve.

The price action in North America is likely to remain subdued as trader look to tomorrow’s CPI and Retail Sales data which should provide a much better gauge of both inflation and growth potential in the US economy and could revive the dollar rally if both reports beat their mark. The possible event risk on the docket is Mario Draghi’s participation on a panel in Washington DC about Macro policy issues. If Mr. Draghi makes any off hand remarks about QE taper, the EURUSD could quickly pop to 1.1900 as a result.