Dollar under pressure after FOMC Minutes

Good Morning,

- The dollar under pressure, after the FED indicated that it was not in a rush to end quantitative easing and begin hiking rates.

- Asian shares: Japan's Nikkei -0.56%, Hong Kong's Hang Seng 0.22% (07:03 GMT), Korea's Kospi 0.12%, Australia's ASX 200 0.22% and China's Shanghai -0.01%.

- According to minutes from the last FED’s meeting released on Wednesday, the central bank acknowledged recent strengthening in the U.S. economy but suggested it was unlikely to raise policy rates until the second half of 2015. The absence of a more hawkish message from the Fed eased worries over interest rate rises and helped Wall Street snap a two-day slide on Wednesday, while driving U.S. Treasury yields lower.

- The Fed minutes confirmed that the U.S. central bank's monthly bond purchases would probably end in October and showed that policymakers debated the complexities of unwinding a stimulus program that has flooded the financial system with over $2 trillion.

- The dollar's index against a basket of six major currencies dropped to 79.976, its lowest in a week.

- ECB’s President Mario Draghi yesterday has reiterated the ECB is ready to use "unconventional instruments" if needed to boost growth, but he devoted most of a speech this week to press for closer European integration to deliver growth and jobs.

- Bank of America on EUR/USD: "The Euro Stoxx Banks Index has broken down, completing a 6m Head and Shoulders Top. A close below 145.40 confirms the top and turn lower, targeting 130.52/124.93 before renewed basing and a resumption of the long term (2yr) bull trend," BofA adds. This, according to BofA, could push EUR/USD lower reinforcing that its medium, potentially long term, bear trend is resuming after a 2-month hiatus. "Initial targets are seen to 1.3212 (swing target) ahead of 1.3104 and then the 1.2777/1.2685 zone and eventually below. Our bearish view would prove incorrect on a move above the 1.3701, Jul-01 high," BofA argues. In line with this view, BofA holds a short EUR/USD position as trade recommendation targeting 1.3212, with a stop at 1.3705.

- Consumer confidence in Japan increased in June. The consumer confidence index rose to 41.1 in June from 39.3 in May, with all the sub-indices contributing positively to the overall index. The highest level of confidence since December 2013.

- Japan's core machinery orders unexpectedly fell 19.5 percent in May from the previous month, casting doubt over the outlook for a pickup in capital spending.

- PBOC’s Zhou says they will cut FX intervention “noticeably” when time is right. China aims for reasonable, balanced exchange rate. Global markets aren’t stable yet. Global market turbulence means China needs caution. China can speed up reform if global markets stabilize. will move to interest rate liberalization. Wants to have policy rates to guide market rates. PBOC preparing 2 or 3 policy tools for short and mid term rates. Interest rate liberalization can be completed in 2 years but depends on external conditions.

- China’s exports rose in June from a year earlier and imports rebounded from a drop in May. Overseas shipments gained 7.2 percent from a year earlier, compared with the median estimate for a 10.4 percent increase in a Bloomberg survey. Imports rose 5.5 percent, leaving a $31.6 billion trade surplus.

- The Australian dollar slipped to $0.9370 level after figures showed unemployment rose to 6.0 percent last month

- The New Zealand dollar hit a three-year high against the dollar, riding on a tailwind created after ratings agency Fitch upgraded its outlook on the country's AA rating to positive.

- Watch today: French output, US store sales & jobless.