Forex Today: Fed cooling down tightening, dollar still strong

Valeria Bednarik FXStreet

What you need to take care of on Thursday, August 18:

The American dollar finished Wednesday higher against most major rivals on Wednesday, despite suffering a near-term setback following the release of the FOMC Meeting Minutes.

The greenback suffered a short-lived setback following the release of the Federal Reserve document, which showed that US policymakers unanimously agreed to hike rates by 75 bps, seeing a slowing pace of hikes at some point. It also read that many Fed officials saw the hazard the Fed could tighten more than necessary. Furthermore, some participants said the policy rate would have to reach a “sufficiently restrictive” level to control inflation and remain there “for some time.”

The EUR/USD pair managed to post modest intraday gains and settled around 1.0180, although the local GDP was downwardly revised. The GBP/USD pair, on the other hand, remained under pressure and finished the day at around 1.2050.

Commodity-linked currencies were among the weakest, with AUD/USD now trading around 0.9630 and USD/CAD just above 1.2900. The NZD/USD is down to 0.6270, as the New Zealand dollar retained its strength despite RBNZ Governor Orr saying they did not consider a 75 bps rate hike and lifted the main rate by 50 bps.

The greenback posted modest advances against safe-haven currencies, with USD/CHF trading around 0.9510 and USD/JPY at 135.00.

Gold trades at $1,765 a troy ounce, extending its weekly slide, while crude oil prices spent the day consolidating losses. WTI is changing hands at $87.60 a barrel.

Australia employment data coming up next.

Dogecoin Price Prediction: A $0.02 DOGE by 2023

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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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