The OPEC meeting and the US Nonfarm Payrolls rocked the market last week. The market is torn between optimism about the global economic recovery and concerns about the new coronavirus strains.
Evergreen buck is at 1-1/2 week maximums on Fed minutes
On Thursday, the main US currency was seen at one-and-a-half week maximums versus a group of key rivals, following overnight revenues after minutes of the Fed’s January gathering underlined hopes for faster lifts in American interest rates.
Traditionally employed to gauge the greenback’s value versus a basket of six leading currencies, the US dollar index hit 90.11, having reached a maximum of 90.17, which is the most striking outcome since February 12.
The US dollar index has currently tacked on about 2% having dived to a three year minimum of 88.15 the previous week.
The minutes of the main US bank’s January 30-31 policy gathering uncovered that policymakers strengthening confidence in the American economy backed their plans to keep lifting short-term interest rates already in March.
The vast majority of traders stressed that a stronger outlook for economic surge increased the probability that further policy firming would be for good.
The common currency stood at its lowest value versus the evergreen buck since February 12. The currency pair EUR/USD was last seen at 1.2276, having finished last trading session down 0.46%.
However, the evergreen buck headed south versus the Japanese yen. The currency pair USD/JPY decreased 0.29% showing an outcome of 107.45.
Apparently, demand for the safe haven Japanese yen was backed as anticipation of a faster tempo of monetary tightening by the US major financial institution dented stocks, equities, thus affecting risk appetite.
Market participants tend to cling to the Japanese yen in times of market uncertainty because the given asset is supported by Japan's current account surplus that ensures more resilience compared to currencies of so-called deficit-running countries.
The common currency slumped versus the Japanese yen. EUR/JPY decreased 0.37% hitting 131.89.
The British pound lost ground versus the US currency, with GBP/USD diving 0.24% to a one-week minimum of 1.3884.
All eyes are turning to the Federal Reserve and the US dollar. How to trade XAU/USD, EUR/USD, and GBP/USD?
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The overall market sentiment is risk-on. The S&P 500 index (US 500) is getting close to the all-time high. Oil is recovering quickly from its recent losses.
What will happen? The FOMC statement will be published at 21:00 MT (GMT+3) on Wednesday, July 28…
PMI reports from the EU, the UK, and the USA will be released during the day!