FOMC minutes fail to provide catalyst for further USD strength – MUFG


Share:

The US dollar has continued to weaken in the Asian trading session following the release overnight of the latest FOMC minutes from their meeting on the 14th December notes Lee Hardman, Currency Analyst at MUFG.

Key Quotes

“US dollar weakness accelerated after USD/JPY broke below the 117.00- level. The FOMC minutes have triggered a temporary correction lower for the US dollar which in part backs up our view that recent strength appears to have been running a little ahead of the improvement in key short-term fundamental drivers. US yields have recently stabilized at higher levels creating a less supportive environment for further US dollar upside in the near-term which will likely require a fresh catalyst.”

“The latest FOMC minutes did not provide the fresh catalyst required to re-energise the Trump reflation trade. On balance the minutes were hawkish providing further evidence that the Fed is shifting towards a faster pace of rate hikes in the coming years. Almost all FOMC participants indicated that upside risks had increased to their forecasts with prospects for more expansionary fiscal policy. However, the uncertainty around the timing, size and composition of fiscal stimulus continues to warrant some caution in the near-term.”

“The updated economic forecasts prepared by the Fed’s staff also stuck a more cautious tone by anticipating that economic growth was only likely to be “slightly higher” over the next several years as the likely increase in fiscal stimulus would be “substantially counterbalanced” by higher interest rates and a stronger US dollar. In these circumstances, the US dollar should continue to find it more difficult to advance further in the near-term.”

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended content


Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended content

Editors’ Picks

AUD/USD aims higher amid upbeat mood, mixed US data

AUD/USD aims higher amid upbeat mood, mixed US data

The Aussie Dollar registers minuscule gains against the US Dollar as Friday’s Asia session begins. The pair remains capped on the upside despite hitting a new month high at 0.6595, as a key technical resistance level that acted like a magnet drove the exchange rate toward the 0.6550s area.

AUD/USD News

EUR/USD now retargets the 1.0900 barrier

EUR/USD now retargets the 1.0900 barrier

EUR/USD printed humble gains around the 1.0820 zone following an unsuccessful attempt to revisit or surpass the 1.0900 mark earlier in the session, always amidst further indecisive price action in the Greenback.

EUR/USD News

Gold slides on rising US yields as data portrays solid economy, delaying Fed rate cuts

Gold slides on rising US yields as data portrays solid economy, delaying Fed rate cuts

Gold price prints modest losses on Thursday after economic data from the United States portrays the US economy as solid based on strong employment figures. The XAU/USD trades within the $2,020-$2,024 area, down by 0.06%.

Gold News

Bitcoin price breakdown possible as European Central Bank says BTC fair value is still zero

Bitcoin price breakdown possible as European Central Bank says BTC fair value is still zero

Bitcoin price’s horizontal consolidation continues to extend, but the support level is wearing thin as the days go by. As the current state of uncertainty continues, it is imperative to remember that markets tend not to wait so long.

Read more

Big tech rises on a promising AI future

Big tech rises on a promising AI future

The S&P 500 surged to an all-time high on Thursday following Nvidia's much stronger-than-expected quarterly results, which buoyed the broader tech sector. Nvidia's stock soared more than 14.5% to reach an all-time high after the company reported a remarkable 265% year-over-year increase in total revenue.

Read more

Forex MAJORS

Cryptocurrencies

Signatures