Forex Signals – Dollar Flat Fed Disappoints
FxPremiere.com – The dollar was flat on Thursday morning in Asia over disappointing minutes from the U.S. Federal Reserve’s last policy meeting.
Forex Signals – The U.S. dollar was down
The U.S. Dollar Index that tracks the greenback against a basket of other currencies inched up 0.03% to 93.052 by 9:44 PM ET (2:44 AM GMT).
The minutes, released on Wednesday, gave investors few clues on whether the Fed will adopt a more dovish policy framework in the months ahead.
Reserve Bank of Australia Monetary policy Meeting Minutes
Although it had been widely expected that the policy would adopt an average inflation target and seek to push inflation above 2%, the minutes were vague regarding the issue. They stated that “a number” of Fed members suggested that would be helpful to make a revised statement on its policy strategy at some point, without any further details.
Forex Signals – Dollar rebounds
“Traders were hoping [the minutes] would cement a clear consensus in the Fed’s ranks for a series of key changes in the 18 September meeting,” Pepperstone head of research Chris Weston told Reuters.
Forex Signals – Federal Reserve Decision in Focus
“[But] there seems little consensus in the Fed collective to adopt an inflation-targeting regime, which is what so many have positioned for.”
The minutes also struck a gloomy note about the U.S. recovery from COVID-19, with Treasuries seeing a modest sell-off after the minutes revealed Fed skepticism over capping government bond yields to encourage recovery and investment.
Some investors warned that the dollar could stay on a down note for longer, with short bets against the greenback at their highest level since 2011 and long bets on the Euro also seeing a record high.
“All that was needed to push up the dollar was a catalyst; the minutes provided the catalyst,” Commonwealth Bank of Australia (OTC:CMWAY) currency analyst Joe Capurso.
“Nevertheless, we still expect the dollar to track lower. The rest of the world economy, led by China, is recovering…we consider the AUD’s fall overnight as a short-term pothole along a road that trends higher,” he added.
Investors will now see whether the Fed will unveil more details during the Jackson Hole symposium, due to take place from August 27-28, or at the next Fed meeting in September.
The USD/JPY pair was also flat, inching up 0.02% to 106.12.
Forex Signal Dollar Down Amid Rising U.S.- China Tensions
The AUD/USD pair edged down 0.12% to 0.7172 and the NZD/USD pair inched down 0.03% to 0.6555.
The USD/CNY pair inched up 0.07% to 6.9243, with U.S.-China tensions continuing to mount after the U.S. on suspended its extradition treaty, as well as ending reciprocal tax treatment, with Hong Kong earlier in the day. The People’s Bank of China is also set to release its loan prime rate later in the day, which is widely expected to remain unchanged.
The GBP/USD pair inched up 0.01% to 1.3100.
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Forex Signals – Dollar Flat Fed Disappoints – Privacy Policy
![The dollar was down on Monday morning in Asia, giving up some of its gains from Friday. U.S.-China tensions rose over the weekend after White House trade advisor Peter Navarro suggested in a “This Week” interview that Beijing sent "hundreds of thousands of Chinese on aircraft to Milan, New York and around the world” to spread the virus after hiding it from the world for two months. Meanwhile, U.S. Federal Reserve Chair Jerome Powell said in a separate interview that the U.S. economy could shrink up to 30% in the second quarter but will avoid a second Great Depression in the long run. The U.S. Dollar Index that tracks the greenback against a basket of other currencies fell 0.11% to 100.325 by 11:32 PM ET (4:32 AM GMT). “At the fore of market participants’ minds is that we are seeing those (China) tensions just ratcheting higher, so there has been support for the U.S. dollar on the back of that,” Commonwealth Bank of Australia (OTC:CMWAY) FX analyst Kim Mundy told CNBC. “Also comments last week from Fed officials around the risks to the U.S. economy being skewed to the downside, risks around a second wave of infection, I think that will also continue to underpin the U.S. dollar this week.” The USD/JPY pair gained 0.10% to 107.12 after Japan slipped into recession for the first time since 2015. The USD/CNY pair gained 0.06% to 7.1058. The Trump administration blocked chip supplies to Huawei Technologies, and investors are on edge for a response after a possible Chinese retaliation was reported. The GBP/USD pair rose 0.05% to 1.211. Andrew Haldane, Bank of England chief economist, said on Saturday that the bank is considering negative interest rates. “The economy is weaker than a year ago and we are now at the effective lower bound, so in that sense it’s something we’ll need to look at - are looking at - with somewhat greater immediacy. How could we not be [looking at negative rates]?” he said in an interview with the Telegraph. Down Under, the AUD/USD pair jumped 0.51% to 0.6447. Australia added its voice to the call for an examination into China’s initial handling of the COVID-19 virus, and China suspended beef imports from four companies in New South Wales last week. But there were reports of conciliatory remarks from the Chinese Foreign Ministry. The NZD/USD pair was up 0.45% to 0.5958.](https://www.fxpremiere.com/wp-content/uploads/Forex-Signal-Dollar-Down-Amid-Rising-U.S.-China-Tensions.jpg)
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