The dollar rebounded today against all major currencies as tomorrow’s FOMC Meeting comes into focus. This price action started early on poor reads from UK inflation and German and Eurozone Sentiment data.
The Euro staged a strong rebound today after a poor finish to last week. A string of soft regional and Eurozone CPI reads started the Euro off on weak footing Friday. Further pressure was added on strong U.S. data that included Industrial Production, JOLTs Job Opening and Michigan Consumer Sentiment; the Euro finished the week at the lowest level since March 1.
The Canadian dollar has been the worst performer among the major currencies today, continuing its recent poor run of form. The Loonie has been undermined amid concerns over planned US tariffs on steel and aluminum.
The U.S. dollar appreciated during the week against major pairs. The currency got a boost from the release of the minutes from the January Federal Open Market Committee meeting. The brief statement was slightly hawkish, but the full notes from the meeting revealed the U.S. central bank upgraded its economic projections from those made in December and expects the 2% inflation target to be met in the mid-term.
U.S. investors were left feeling a little anxious on Tuesday after indices wiped out the strong gains seen at the open to end the day a little lower, but these worries may be quickly alleviated with futures pointing to another positive open on Wednesday.
The U.S. dollar is mixed against major pairs after a week where Fed speakers offered a mixed narrative. The majority of policy makers agree that the massive balance sheet accumulated during the quantitative easing program from the U.S. central bank should start shrinking sooner rather than later. The point of debate remains the number of rate hikes in the horizon, with St. Louis Fed President James Bullard calling it "unnecessarily aggressive."