In a volatile London Session, the US dollar has hit new lows versus both Euro and the Swiss Franc. Though volume is very thin and liquidity is at a premium, the undeniable story of the market is the unrelenting pressure on the Greenback as traders realize that another Fed rate cut may be coming. Secondarily, we have seen a surprising appetite for “risk” in the FX market. EURJPY, the proxy for the Carry Trade, has dealt significantly higher, crossing above meaningful technical levels. As this heavy activity within an unstable environment keeps European players busy, all eyes are slowing shifting to the FOMC minutes looming in the New York afternoon.
EURUSD experienced a stealth rally at the expense on the US dollar, dealing to fresh all-time highs near 1.4800. USDJPY stayed in the background, holding in the 110.00-50 zone. Consequently, EURJPY rocketed north of 163.00 at its peak after closing yesterday’s NY session around 161.00. To the downside, USDCHF slid below 1.1090, the final area of chart support dating back to April 1995. Other pairs throughout the market acted as expected, with Cable trading to the topside while USDCAD floundered below 0.9800 (prior to the CPI data at 0700 EDT).
The FOMC minutes are likely to be a key driver for the USD today, in particular because the Fed will be publishing a new set of economic forecasts along with the minutes. This report will offer transparency into the US economy via employment, inflation, and economic growth forecasts.
Upcoming Economic Data Releases (New York Session)
- 1400 EDT US Minutes of Oct 31st FOMC Meeting (relevance: high)
