Forex Today: Dollar holds high ground amid growing fears, FOMC Minutes eyed

Here is what you need to know on Wednesday, August 18:

Fear about slowing global growth and rising covid cases is weighing on sentiment and supporting the safe-haven dollar. The Fed's Meeting Minutes are eyed after the RBNZ surprised by leaving rates unchanged. Gold remains below $1,800 and cryptocurrencies have been edging lower. 

US COVID-19 cases continue rising, nearing a daily average of 140,000, resulting in pressures on hospitals in some undervaccinated areas. 

Federal Reserve Chair Jerome Powell refrained from making any significant comments in his speech on Tuesday, saying only that Delta covid variant causes uncertainty. He leaves the focus on Wednesday's FOMC Meeting Minutes.

They are set to reflect differences within the central bank between those wanting an announcement about tapering bond buys in September and those holding back. Comments on inflation – transitory or not – and employment will be of high interest. 

FOMC Minutes July Preview: More new questions than answers

On Tuesday, the US reported disappointing Retail Sales figures for July, adding to the gloomy mood and keeping the safe-haven dollar bid. Headlines sales dropped by 1.1% in July. 

US July Retail Sales: Poor but not yet a trend

The Reserve Bank of New Zealand surprised markets by leaving its interest rates unchanged at 0.25% instead of raising them. While the RBNZ is set to hike borrowing costs later this year, its response to New Zealand's fresh lockdown has broader implications for markets. 

EUR/USD is trading close to 1.17, the August low, as the dollar gains ground. Final eurozone inflation figures are due out later in the day. Europe has seen its covid caseload gradually decrease. 

GBP/USD is trading below 1.3750, at the lowest in three weeks amid dollar strength and after the UK Consumer Price Index missed expectations with 2% YoY in July compared with 2.3% projected. 

USD/CAD is hovering above 1.26 as oil prices struggle to recover and ahead of both crude inventory data and Canada's inflation statistics. 

Gold has been trading around $1,791, stable amid limited moves in US Treasury yields. 

Bitcoin is hovering above $45,000 consolidating gains seen earlier this month. Ethereum has retreated from the highs but holds above the $3,000 level. 


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