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 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 MinutesThey 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.
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“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.
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“[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.
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The AUD/USD pair edged down 0.12% to 0.7172 and the NZD/USD pair inched down 0.03% to 0.6555.
The GBP/USD pair inched up 0.01% to 1.3100.
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