When are the FOMC minutes and how could they affect the Dollar?

• FOMC minutes are coming up and the DXY, slightly below its year peak, is resembling the dovish bias in the markets.
• FOMC minutes to show that the Federal Reserve is focused on risks of protracted trade wars.

Today brings us the highly anticipated Federal Open Market Committee's minutes of the July board meeting where the Federal Reserve cut interest rates by 25 basis points in what Fed' governor Powell termed the decision as an insurance rate cut against external headwinds - In other words, to safeguard against importing a recession. 

Indeed, we have seen plenty of action since the last meeting which could give the minutes a little twist of hawkishness in comparison to what the markets have been pricing - toing and froing between expectations of the Fed holding at their next meeting, (based on encouraging data such as retail sales and hot Consumer Price Index), or providing another 25 basis point cut due to elevated external economic and geopolitical risks.

Unfortunately, the minutes will likely be considered history by now and irrelevant due to the latest developments in trade wars and the Trump Administration's announcement on the final tranche of tariffs which will place the spotlight on Powell this Friday at Jackson Hole. However, the minutes should reflect the member's thinking that the combination of political event risk and panicked markets adds to recessionary risks, with the Federal Reserve focused on external risks which will be including China and protracted trade wars.

How could the minutes affect the Dollar? 

When it comes down to the Dollar, markets are forward-thinking, and given that we have already heard from the likes of Federal Reserve speakers Bullard, Evans, Daly, Rosenberg and George all leaning towards a neutral stance and relatively bullish on the economy, the events this week could be setting up the markets for a disappointment - Indeed, equities have been resilient and besides Trump jawboning the Dollar lower, rather unsuccessfully, there is very little to expect from these events that could have any material impact on what the markets have already priced in - However, the DXY, slightly below its year peak, has edged down from the levels recorded at the start of the week, resembling the dovish bias in the markets and the minutes likely reflect the lack of continuity among board members which should ultimately keep a lid on the Dollar today, which, by the metrics of the US trade-weighted broad dollar index, is already trading at the highest levels since 1973.

Key notes:

• FOMC minutes to attempt to clarify the path forward – TD Securities 
• Renewed Fears of a Prolonged Trade War

About the FOMC minutes

FOMC stands for The Federal Open Market Committee that organizes 8 meetings in a year and 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.