Everything can change in Minutes – DBS

FXStreet Insights Team FXStreet

Fed officials looked past last Friday’s better-than-expected US jobs data and affirmed the two cuts pencilled in previous month’s Summary of Economic Projections, DBS’ FX strategist Philip Wee notes.

Fed Minutes are on their way

“Today’s FOMC Minutes should echo New York Fed President John Williams’ confidence that inflation was moving towards the 2% target because the US economy and the labour market were getting back in balance, allowing interest rates to move towards a neutral setting.”

“Minneapolis Fed President Neel Kashkari estimated the neutral rate to be close to 3%, where we see the Fed Funds Rate falling to next year from today’s 5%.”

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FXStreet Insights Team

FXStreet

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EUR/USD remains bid, focus stays on 1.1900

EUR/USD has broken its two-day run of losses and is ticking modestly higher on Thursday, hovering around the 1.1880 area as the US Dollar struggles to find clear direction. Weekly Initial Jobless Claims rose more than expected, taking a bit of shine off the Greenback, but markets are largely in wait-and-see mode ahead of Friday’s US CPI release.

GBP/USD sticks to the bid bias, still below 1.3700

GBP/USD is trading with decent gains around 1.3650 on Thursday. Indeed, Cable is attempting to shake off the weakness seen earlier in the week amid another choppy session for the Greenback, while a run of disappointing UK data has so far failed to derail the pair’s tentative recovery.

Gold recedes slightly, trades below $5,100

Gold remains stuck in choppy trade on Thursday, deflating marginally just below the $5,100 mark per troy ounce as the US Dollar drifts without a clear trend. Softer US Treasury yields across the curve are offering some support, but with markets treading carefully ahead of Friday’s US CPI release, conviction remains limited and price action continues to look hesitant.