Forex today: FOMC no surprises in minutes, DXY and 10-y US yields lower, stocks higher

Forex today was dominated by the FOMC minutes that failed to entirely appease the dollar bulls with a lack of conviction in the rhetoric while the Fed continue to "speculate" that the poor run of US data of late and a subdued growth rate in Q1 was only transitory. 

Here are the main headlines of the minutes before we go into price action in the FX space for the day: 

FOMC minutes: Fed policymakers agreed that details of balance sheet plan should be announced soon

• Nearly all fed policymakers expressed a favourable view of the staff proposal as a way to reduce central bank holdings in a gradual and predictable manner 
• Fed policymakers agreed that details of balance sheet plan should be announced soon, with start of reductions appropriate this year 
• Most fed officials viewed recent soft inflation as "transitory," though a few raised concerns that progress toward the central bank's 2 percent target had slowed 
• In general, fed officials said their assessment of the economy had changed little since the march policy meeting, with the labour market continuing to improve and risks from the global economy receding 
• Fed officials said they expected a rebound in consumer spending in coming months in light of solid economic fundamentals 
• Fed officials said they saw near-term risks to the economic outlook as roughly balanced, though several noted global geopolitical uncertainty and possible emerging market strains as u.s. rates rise 

On the back of this, most currencies were within a 50 pip range, bid vs the greenback with the DXY dropping and closing around -0.23% for the day. US 10-years were finishing around -1.00% having ranged between 2.2519-2.2957% on the day. Gold was driven higher by the Intermarket correlations but still well below significant upside levels to really want to be heavily diversified in the precious metal. Gold is finishing up +0.50% at $1,257.47 and capped by risk-on markets with the benchmarks higher between 25-40% on the day.

Stocks were relieved that there was nothing too hawkish/expensive from the minutes and the broad agreement on plans to begin shrinking the central bank’s balance sheet. Strangely, however, this sunk yields - good for stocks and risk. Perhaps markets were disappointed that the Fed were simply content with a plan to end the reinvestment of principal of maturing securities to start with instead of ending the reinvestment all at once?

EUR is ending +0.30%, Yen +0.22%, GBP +0.02%, AUD +0.35% and NZD +0.66%. 

The day ahead

• Dallas Fed's Robert Steven Kaplan speaks
• Yearly New Zealand Budget Release is published by NZ Treasury

Key notes from the US session

• US Existing Home Sale: Down in April, up 4.1% so far 2017 - Wells Fargo
• CME Group FedWatch suggests traders still see high probability of June hike
• Gold intermarket: mixed on risk-on stocks, lower 10-years post FOMC minutes
• Iran OilMin: Ready to continue oil output cut for nine or six months
• Russian EnergyMin Novak: Non-OPEC committee recommends to keep current output quotas
• Russian EnergyMin Novak: Nine-month oil output cut extension could be rolled over again