Forex Today: Dollar retains its strength post-FOMC Minutes
What you need to know on Thursday, August 19:
The American dollar retained its dominance across the FX board, ending the day up against most of its major rivals. The greenback suffered a temporal setback mid-US afternoon, following the release of the FOMC Meeting Minutes.
The document showed that some participants suggested that it would be prudent for the committee to prepare for starting to reduce its pace of asset purchases relatively soon. At the same time, “many participants noted that, when a reduction in the pace of asset purchases became appropriate, it would be important that the Committee clearly reaffirm the absence of any mechanical link between the timing of tapering and that of an eventual increase in the target range for the federal funds rate.”
After investors finished digesting the news, Wall Street took a turn to the worse, with all major indexes closing in the red. The DJIA lost 380 points, while the S&P shed 40 points. Government bond yields ticked lower, with that on the 10-year note down to 1.26%.
The EUR/USD pair fell to a fresh 2021 low of 1.1693 on Wednesday, ending the day at 1.1710. GBP/USD settled at 1.3750. The AUD/USD pair stands at 0.7230, near a fresh 2021 low, while USD/CAD trades at 1.2650, its highest for the month.
Gold advanced, ending the day at $1,785.70 a troy ounce. Crude oil prices plunged alongside stocks, with WTI ending the day at $64.30 a barrel.
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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.
