When are the FOMC minutes and how could they affect EUR/USD?

Matías Salord FXStreet

The Federal Open Market Committee (FOMC) minutes, of the April 29^th meeting, will be released on Wednesday at 18:00 GMT. At the mentioned meeting, the Federal Reserve (Fed) kept the Fed Funds rate unchanged at 0.00-0.25% as expected.

Key notes

The minutes follow a presentation on Tuesday from Chair Powell and also many officials had spoken on public since the meeting. So the room for new developments is small. Market participants will probably look for mentions about negative rates and also about the yield curve and the purchase program.

“Discussions in the edited minutes may seem somewhat out of date as the national conversation in the almost three weeks since the meeting has rapidly moved from the revelations of the economic debacle to the apparent success of several states in reopening parts of their economies and considerations about the criteria for opening the others”, argues Joseph Trevisani, Senior Analyst at FXStreet.

Analysts at TD Securities consider the minutes will be closely scrutinized for signs of an upcoming change in the forward guidance. They see the Fed adopting a combination of a Yield Control Curve (YCC) and Average Inflation Targeting (AIT) later this year.

Implications for EUR/USD

The minutes are not expected to be a game-changer. The meeting itself was mostly ignored and on Tuesday, Chair Powell presented testimony to a Senate committee, so there is not much left to say. Only surprises or some consideration that the market has not priced in, could impact on the currency market.

Many crosses versus the US dollar are on the edge of breaking relevant technical levels. In the case of EUR/USD, it is testing the 1.0990/1.1000 area. A break higher should clear the way to an extension of the recovery and it would be the end of a 7-week range around 1.0900.

The greenback arrives to the minutes under pressure and they could give the excuse to extend losses. A dovish tone could trigger the slide, it would require some kind of talk about negative rates for example.

On the flip side, if the US dollar recovers momentum, it could have space for a considerable retracement. EUR/USD would pull back into the range, probably to the intermediate zone at 1.0900 and below to the 20-day moving average, now at 1.0850. The critical support remains the 1.0750/60 area.

About the FOMC minutes

FOMC stands for Federal Open Market Committee. It organizes eight meetings per year where it reviews economic and financial conditions, determines the appropriate stance of monetary policy and assesses the risks to its long-run goals of price stability and sustainable economic growth. FOMC Minutes are released by the Board of Governors of the Federal Reserve and are a clear guide to the future US interest rate policy.

Author

Matías Salord

FXStreet

Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.

AUD/USD trims some losses, bounces back to 0.7150

AUD/USD has traded on the back foot on Monday, coming close to the 0.7100 mark before rebounding toward the 0.7150 region ahead of the opening bell in Asia. The Greenback’s solid performance has kept the risk complex under pressure, sending the Aussie to fresh monthly lows on the back of rising bets for a Fed rate hike this week. on Tuesday, investors are now expected to closely follow key data releases in China.

USD/JPY: Japanese Yen edges lower vs USD amid Middle East jitters as Fed, BoJ meetings loom

The USD/JPY pair attracts some buyers at the start of a new week and climbs closer to the 154.00 mark during the Asian session, reversing a part of Friday's losses. Spot prices, however, remain confined in a range held over the past week or so and within striking distance of a nearly seven-month low, touched last Tuesday, as traders await this week's key central bank events.

Gold retests $4,300; USD losses momentum

Gold picks up fresh upside traction and challenges the key $4,300 mark per troy ounce on Monday. The yellow metal, however, remain on the back foot on the back of marked gains in the US Dollar and rising US Treasury yields across the curve.

JasmyCoin: Upbit delisting raises risk of further losses

JasmyCoin shows signs of stability at the time of writing on Monday. However, the token remains constrained between support at $0.0035 and resistance at $0.0040. Since May, its technical structure has continued to deteriorate, with the price falling from highs of $0.0078. JASMY’s outlook suggests that bears have the upper hand as bulls fight to defend key support levels.

Will the Fed deliver the hawkishness markets are pricing in?

Fed hike bets increase after PPI and CPI reports. Updated dot plot to be crucial for the dollar’s reaction. Warsh’s independence faces test amid Trump’s pressure for lower rates. For the Dollar to extend gains, Fed needs to satisfy current hawkish bets.

Venezuela’s 65-billion-barrel Oil deal could reshape America’s inflation fight

The United States (US) has secured unprecedented access to part of Venezuela’s vast Oil reserves. The timing is particularly significant as the war with Iran is disrupting Middle Eastern supplies, keeping energy prices elevated and reviving concerns about inflation.