Dovish FOMC minutes lifted EUR/USD

EUR/USD 

Broad-based USD weakness provided the main source of direction for the pair in early trade as European participants had their first opportunity to digest the more dovish than expected FOMC minutes release after their Asian-Pacific counterparts had already put pressure upon USD which saw USD/JPY trade with heavy losses. In terms of economic commentary out of the Eurozone today, the prospect of further easing by the ECB continues to remain at the forefront of participant’s thoughts with ECB’s Praet saying the signal of readiness to launch QE is what is important now. This failed to present the pair with much in the way of a reaction and failed to push prices below the 1.3850 level. Given the recent gains in the pair, EUR strength remains a core issue across the Eurozone given its potential implications for the areas recovery and moving ahead could be yet another factor for the ECB to consider when evaluating the need for further monetary action. 

GBP/USD

The pair initially traded with firm gains following the aforementioned USD weakness and resided near to 2014 highs of 1.6823 with 2009 highs lying just beyond at 1.6845. However, the already discussed broad-based EUR strength lifted EUR/GBP and consequently filtered through into GBP/USD, leading the pair into negative territory. Today saw the BoE rate decision, which as widely expected showed the central bank are not willing to adjust their monetary policy at this moment in time. Since the meeting was reduced to one day due to Carney’s commitments in Washington, the release did not even see an unwinding of outside dovish positions and as such failed to prompt a reaction for the pair. 

USD/JPY

USD/JPY sank below 101.50 today as the FOMC minutes piled pressure on the USD-index as the Fed allayed any fears of a premature rate hike. A dismal set of trade figures from China compounded the effect, as both imports (-11.3% vs. Exp. 3.9%) and exports (-6.6% vs. Exp. 4.8%) plummeted below expectations, prompting additional strength in the JPY. Later in the European morning, a high volume clip of selling in the Eurostoxx futures pushed investors into safe havens, as USD/JPY sank to monthly lows of 101.42. With the 101.50 support level broken, traders now eye March 19th's low at 101.30 ahead of the 200DMA at 100.81 as the next levels of support. Tomorrow's session brings the preliminary University of Michigan Confidence figure from the US, with financial heavyweights Wells Fargo and JP Morgan both due to report.