Dollar falls, retraces losses as Fed minutes seen dovish

Good morning,

- Japan Economy Minister Amari: Don't see any change to recovery trend in Japan... true there is weakness in some areas of Japan's economy...Will work to make sure capex plans don't collapse.

- $NZD, $AUD, and $EUR are expected to be the most active majors vs $USD with 1W implied volatility at 11.89, 11.37, and 8.85 respectively.

- On Thursday session, $EUR has been the best performing major vs $USD with +0.09% spot returns while $NZD has been the worst with -0.13%.

-EU’s Dijsselbloem: Creditors Agree Greek Debt Relief Should Be Via Capped Debt Service Costs (Circa 15% Of GDP).

-Williams said the Fed should use the FF rate as the sole policy tool. Would be difficult coming off of zero and a still-large balance sheet..Global outlook hasn't worsened since Sept. meeting, negative rates is good question for future but not today...Sept. Jobs report is just one month, we look medium-term..Says Sept. payrolls report consistent with his outlook, domestic US demand is still strong..Lots of signs that global growth is going to be slower. Lower rates may accompany slower global growth.

-Eurogroup Chief Dijsselbloem: Greek debt management should be okay, US monetary policy should normalize.

- The dollar touched its lowest level against the euro in over two weeks but quickly pared its losses after minutes released on Thursday from the Federal Reserve's September meeting reinforced the view that the central bank would not hike U.S. rates until next year.The minutes showed that Fed policymakers acknowledged the possibility that downside risks to economic activity had increased somewhat, and that several participants were worried that inflation could be dragged even lower.."The dollar is reacting negatively to the slightly more dovish comments about near-term prospects for inflation," said Patrick Maldari, senior fixed-income investment specialist at Aberdeen Asset Management in New York. The dollar index, which measures the greenback against a basket of six major currencies, also hit its lowest level in nearly three weeks after the minutes, at 94.984. The index pared losses, however, and was last down 0.21 percent at 95.294, or roughly unchanged from its level prior to the release of the minutes.''

-The Australian Dollar continued to push higher for a seventh consecutive day against its US counterpart, making for the longest winning streak in two years. Prices are now testing the underside of a consolidation range broken in late August as buyers attempt to clear a path above the 0.73 figure. A daily close above range floor support-turned-resistance at 0.7259 opens the door for a challenge of the 0.7387-0.7438 area, marked by the 38.2% Fibonacci retracement and the August 11 high...Risk/reward considerations argue against taking up a trade at current levels. Prices are too close to resistance to make for an attractive long trade while the absence of a defined bearish reversal signal argues against taking up the short side. On balance, the long-term trend remains bearish and we will look for the upswing to yield a selling opportunity to become involved.

- US earnings releases over the next two weeks at the heart of speculation of FED monetary policy.

- Oil, Copper Surge on Upbeat Demand, Low USD; Gold Volatile to Fed Note.

- Major news for today: US September Import & Export Price Index, CAD Unemployment Rate, French&Italian Production data, IMF annual meeting beggins in Lima, Peru (9-11 Oct.)

Have a great weekend!