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Dollar Down On Fed Minutes

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USD

On Thursday, the Greenback struggled against its major rivals after July’s Federal Open Market Committee (FOMC) meeting minutes showed policymakers were increasingly concerned about low inflation rates and could delay a rate hike.

On the release front, the U.S. homebuilding unexpectedly declined in July as the construction of multi-family houses fell to a 10-month low; however, the recovery in the housing market is expected to be supported by strong job growth.

The economic calendar for Thursday has the Industrial Production for July lined up. This measures changes in the volume of output produced by the manufacturing, mining, and utility sectors, is forecast to show 0.3% vs. previous reading of 0.4%.

  • The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell as much as 0.06% to settle at 93.49 pips from Wednesday's three-week high of 94.145.

GBP

The Sterling pound edged up vs. the greenback on Wednesday as the UK’s latest employment data printing better than anticipated results. An official data shows that the UK’s unemployment rate fell by 57k in the three months to June, bringing the jobless rate down to 4.4% from the previous 4.5, it’s lowest since 1975.

On the release front, UK retail sales for July, which measures the change in the volume of sales by retailers in the UK, is expected to show 1.2% vs. 3.0% vs. the previous reading.

The Sterling pound fell as much as 0.1% at the beginning of the day, to settle at $1.2891.

EUR

The economic data from the euro-zone came out as predicted yesterday with Italy reporting a 0.4% growth while the region as a whole grew at 0.6%. Though the Final CPI readings are due today, markets will be looking at the European Central Bank’s minutes for clues on tapering.  

JPY

The Japanese currency took advantage of weakness in the greenback but the yen still remained weak against its higher-yielding counterparts. Earlier this morning, the Japanese economy showed a higher than expected trade surplus of 0.34 trillion yen against a predicted 0.2 trillion yen. 

Gold

Gold went up on Thursday, as the Greenback remained week after minutes from the U.S. Federal Reserve's July meeting at which the decision makers voted unanimously to hold U.S. interest rates unchanged. In the July policy statement, the Federal Reserve raised many worries over the slow pace of inflation, noting that  it expects to start canceling its balance sheet “relatively soon”.U.S. gold futures for December delivery rose 0.96%, to settle at $1,294.79 per ounce, while Spot gold was up 0.3% at $1,287.01.

Oil

Earlier today, Oil prices recovered slightly after sinking more than 1% in the previous session as traders saw buying opportunity on an overnight fall on mixed U.S. inventory data.

On the release front, data on Wednesday showed that the U.S. crude oil stocks C-STK-T-EIA declined by almost 13% from their peaks in March to 466.5 million barrels.

U.S. West Texas Intermediate (WTI) crude futures CLc1 rose as much as 0.04%, to settle at $46.80 a barrel, while Brent crude futures LCOc1 were at $50.44 per barrel up 0.3%, from their last close.

The most important economic events:

  • EUR ECB account of the monetary policy meeting: (GMT 11:30) – Important
  • USD Initial Jobless Claims (AUG 12): (GMT 12:30) – Medium – Forecast (240k) – Previous (244k).
  • USD Industrial Production (JUL): (GMT 13:15) – Medium – Forecast (0.3%) – Previous (0.4%).
  • USD Leading Indicators (JUL): (GMT 14:00) – Medium – Forecast (0.3%) – Previous (0.6%).

Disclaimer
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