EUR/USD drops to daily lows near 1.2180 as USD gathers strength on FOMC Minutes
- EUR/USD fell sharply with the initial market reaction to FOMC Minutes.
- US Dollar Index posts strong gains above 90.00.
- FOMC Minutes showed some policymakers are concerned about rising inflation.
The EUR/USD pair turned south and dropped to a daily low of 1.2175 during the American session as the minutes of the FOMC's April 27-28 meeting provided a boost to the greenback. As of writing, the pair was down 0.25% on the day at 1.2190.
DXY jumps above 90.00
The FOMC Minutes revealed that a couple of Fed policymakers raised risks of inflation building to unwelcome levels before it becomes sufficiently evident to induce a policy reaction. Additionally, a number of participants argued for a discussion on an adjustment to asset purchases in the upcoming meetings if the economy continued to make progress toward the goals.
The USD gathered strength against its rivals on these relatively hawkish remarks and the US Dollar Index (DXY) climbed to a daily high of 90.20. As of writing, the DXY was up 0.42% on the day at 90.15.
FOMC Minutes: Participants agreed economy is still far from Fed's goals.
In the meantime, the benchmark 10-year US Treasury bond yield is rising 2.7% on the day at 1.681% and helping the USD outperform its rivals.
Technical levels to watch for
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
