Forex trends Thursday: ‘Dovish’ Fed minutes weigh on greenback

U.S. two-dollar billsPhoto by Leslie Shaffer

The U.S. dollar extended recent declines on Wednesday as the release of the latest Fed meeting minutes spurred expectations the central bank may take a hiatus on interest rate hikes.

The minutes from the U.S. Federal Reserve’s Federal Open Market Committee (FOMC) policy setting meeting, released Wednesday, showed policy makers wanted to wait for more information about how the economy is faring before delivering further interest rate increases.

Stephen Innes, head of Asia Pacific trading at OANDA, said he didn’t think the dovish minutes were the main trigger for the selloff in the U.S. dollar.

“Instead, it’s the overall change in Fed narrative after [Fed chief Jerome] Powell walked back overly hawkish ‘autopilot’ rhetoric and is shifting to data dependency rather than policy normalization,” Innes said in a note on Thursday.

Currencies

The U.S. dollar index was at 95.14 at 7:04 A.M. SGT, falling from as high as 95.89 in Wednesday’s session and as high as 96.61 on Friday, according to ICE data.

The 10-year U.S. Treasury note yield was at 2.711 percent at 8:16 A.M. SGT, off levels as high as 2.744 percent on Wednesday, according to Tullett Prebon data.

The euro/dollar was at 1.1553 at 8:17 A.M. SGT after trading in a 1.1437 to 1.1558 range on Wednesday, according to DZHI data.

The British pound/dollar was at 1.2794 at 8:18 A.M. SGT after trading in a 1.2710 to 1.2804 range on Wednesday, according to DZHI data.

The dollar/yen was at 108.136 at 8:18 A.M. SGT after trading in a 107.96 to 109.004 range on Wednesday, according to DZHI data.

The dollar/yuan ended Wednesday at 6.8116 after trading in a 6.8107 to 6.8518 range during the session, according to DZHI data.

The dollar/Singapore dollar was at 1.3528 at 8:19 A.M. SGT after trading in a 1.3521 to 1.3578 range on Wednesday, according to DZHI data.

The dollar/Malaysian ringgit was at 4.100 at 8:08 A.M. SGT after trading in a 4.1083 to 4.1170 range on Wednesday, according to DZHI data.

The dollar/Indonesian rupiah ended Wednesday at 14,117 after trading in a 14,027 to 14,175 range during the session, according to DZHI data.

 

 

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