Will Fed minutes stem euro's bleeding?

U.S. traders are filtering into their desks this hump day to see some broad bullish price action for their home currency.

With the exception of the pound, which has been supported by a hawkish “mutiny” in the most recent BOE minutes, all major currencies are falling against the US dollar. As a few examples, USD//JPY has broken out to a new 4-month high, USDCAD is pressing its highest level in 3 months, and NZD/USD just ticked down to a new 5-month trough under .8400. 

Based on this morning’s price action, traders are bullish ahead of today’s FOMC minutes, which will shed some light on the internal discussions that led to the central bank’s July statement. As a recap, the bank tapered its QE program by another $10B down to just $25B and tweaked its statement to reflect a more optimistic, though still cautious, view on the labor market.

Interestingly, there was one dissent from Fed Governor Plosser, a hard line hawk. If the minutes reveal that other members empathized with Plosser’s views, the USD could extend its gains, but if we learn that Plosser was a minority of one, the greenback could reverse lower on falling interest rate expectations.

 


Source:
 FOREX.com

A Marubozu candle is formed when prices open very near to one extreme of the candle and close very near the other extreme. Marubozu candles represent strong momentum in a given direction.

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