Forex Today: Cautious FOMC put some weight on the greenback

Valeria Bednarik FXStreet

What you need to know on Thursday, July 8:

The dollar came under mild pressure ahead of the close, following the release of the FOMC Meeting Minutes. The document showed that Fed officials consider the standard of “substantial further progress” needed to adjust monetary policy was seen as not having yet been met. Various FOMC members mentioned they expect conditions to reduce the pace of asset purchases to be met earlier than previously expected.

A substantial majority of participants judged that the risks to their inflation projections were tilted to the upside, yet beyond that, the document didn't offer any fresh insights regarding the timing of tapering but showed that some policymakers saw the uncertainty around the economic outlook elevated after the latest data.

The greenback anyway closed the day with gains, mainly against its commodity-linked rivals. High-yielding European currencies ended the day flat against their American rival.

Stock markets were mixed in Asia, but European and American indexes closed the day with gains, with Wall Street underpinned by Fed’s announcement. US Treasury yields remained under selling pressure, with that on the 10-year Treasury note hitting an intraday low of 1.29%.

Gold prices are up for a sixth consecutive day, with the bright metal trading at around $1,804.00 a troy ounce as the US session came to an end.

Crude oil prices came under strong selling pressure on Wednesday, with the US benchmark hitting a fresh two-week low of $71.05 a barrel, its lowest since mid.June. WTI recovered ahead of the close and settled at $72.00 a barrel.

The coronavirus Delta variant continues to spread. America and Europe are failing to contain the spread of the virus, while the UK reported over 32K new coronavirus cases, the biggest one-day increase since late January, although there are no news suggesting restrictive measures will be maintained after July 19. Nevertheless, the number of those falling into critical conditions or dying is low, reflecting the effectiveness of the immunization campaigns.

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Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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