The dollar trade higher after a hawkish tone at the FED's minutes

Good Morning,

- The dollar trade higher after a hawkish tone at the FED’s minutes. The U.S. dollar index, climbed further to fresh 11-month highs at 82.332.

- Asian shares came under pressure on Thursday as a disappointing survey on Chinese manufacturing. Japan's Nikkei 0.85%, Hong Kong's Hang Seng -0.84% (07:15 GMT), Korea's Kospi -1.38%, Australia's ASX 200 0.08% and China's Shanghai -0.44%.

- The FED minutes that release yesterday, showed policymakers debated on whether interest rates should be raised earlier given a surprisingly strong jobs market recovery. Most officials, however, wanted further evidence before changing their view on when rates should be lifted.

- Federal Reserve officials raised the possibility they might raise rates sooner than anticipated, as they neared agreement on an exit strategy. Fed Chair Janet Yellen has committed to use monetary policy to strengthen the labor market so long as inflation remains in check. “Many participants” at the meeting still also saw “a larger gap between current labor market conditions and those consistent with their assessments of normal levels of labor utilization,” the minutes showed.

- Yields on short-term U.S. debt had rise by the most since March as minutes of the Fed's last meeting led markets to price in a greater risk of an earlier hike in interest rates.

- Citi on EUR/USD: Citi notes that it has breached the base of the recent range and is breaking below the support level at 1.3295. "The close below there opens the way for 1.3105," Citi argues. In line with this view, Citi maintains a short EUR/USD position as a long-term trade from 1.3731, targeting a move to 1.2750.

- Swiss trade surplus widens to 3.98 bln sfr in July. Exports from Switzerland rose by a real 4.5 percent in July to 19.26 billion Swiss francs (21.08 billion US dollar), the Federal Customs Office said.

- Britain is exporting cars at a record rate amid strong international demand for luxury brands. The UK has exported more than 5m cars since 2010, marking the best start to a decade, said the Society of Motor Manufacturers and Traders.

- In Britain bond yields jumped on news that two Bank of England policymakers unexpectedly broke rank with colleagues and voted for higher interest rates earlier this month.

- The greenback, rose to its highest in over four months against the yen at 103.965 , not far from the April peak of 104.13. A break there could see the market aim for the 2014 high of 105.45 set in January.

- Japan Manufacturing PMI points to strongest expansion since March.

- The HSBC/Markit Flash China Manufacturing Purchasing Managers' Index (PMI) fell to 50.3 in August from July's 18-month high of 51.7, missing a Reuters forecast of 51.5.

- The soft July data from China have once again generated expectations of monetary easing. Goldman however thinks further monetary easing would have incrementally less of an impact and would come at the cost of financial stability. This diminishing impact, they argue, would result as overcapacity/oversupply restricts long-term borrowing demand and due to interest rate deregulation, which tends to move the long-term risk-free interest rate to a higher equilibrium, as seen in recent data.

- Watch today: Germany PMI for manufacturing and services, US PMI & home sales.

Have a nice Day!