No let-up in the USD buying as few can see little past a hawkish tone to the Fed minutes
|USD/JPY still holding off 104, EUR/USD 1.10. GBP starting to find more buyers.
Waiting for the Fed minutes this evening, we expected to see some moderation in USD levels, but the index has been pushed higher as much of the market can see little past a hawkish tone, given the dissenting members at the Sep meeting and a majority view a hike is likely by year end. Against the greenback, EUR, CHF CAD and GBP all came under pressure through the day, posting new lows but with limited momentum. EUR/USD managed to work through the sizeable bids in the 1.1000’s, testing the lower end of the range, but holding the figure as yet, but remains vulnerable. GBP had another rollercoaster ride overnight after the reports the UK PM May accepted that parliamentary debate on EU proposals was warranted sent the pair racing up from sub 1.2100 lows to just above 1.2300. Gains have since been pared back into the mid 1.2200’s, with NY testing the mid 1.2100’s, but with limited success. EUR/GBP has also seen some movement, through .9100 and just under .9000, but the focus is on the USD pairs for today. USD/CAD has ignored the recovery in Oil prices in recent weeks as Tsy yields have dominated, but another push on 1.3300 has been rejected, though with limited pullbacks a yet. AUD and NZD following similar patterns through the day, but ranges a little more contained. USD/JPY has also been pretty tight on the day, but has also threatened a retest on 104.00. All now depends on how the market reads the minutes tonight, but despite a clearly willingness to push the USD higher, there are some tentative signs that we are seeing some resistance.
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