The US dollar hit session lows moments before the ISM manufacturing data was released. Stops were triggered above 1.25 in EUR/USD and below 118.00 in USD/JPY.
But the headline numbers were stronger than expected and that sparked a turnaround with the euro down to 1.2485 and USD/JPY rebounding to 118.20. The stock market has also bounced after earlier woes.
The prices paid component of the survey was a concern but better new orders and the overall headline are winning the day.
The focus now shifts to Dudley who last spoke in mid-November. At the time he said patience was needed on the timing of the first rate hike but he also said market expectations of rate lift off md-2015 are reasonable