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By Associated FX Analysis Team

Kantox currency update: dollar dives after Fed’s minutes

Published January 10, 2019

Federal Reserve Bank

The US dollar depreciated against its main peers on Wednesday, which has boosted the euro to nearly three-month highs, after the minutes of the Federal Reserve’s last monetary policy meeting confirmed a more cautious approach to interest rate hikes this year.

EUR/USD jumps to three-month highs beyond 1.1500. The euro appreciated on the back of dollar weakness, to break beyond the top of the months trading range, at 1.1500 reaching levels at 1.1565 for the first time since mid-October.  As at London market opening times, the EUR/USD is trading at 1.1540.

GBP/USD: remains capped below 1.2800. The sterling remains on the defensive, with the Brexit debate on the main focus until next week’s parliamentary vote, with the pair limited below the 1.2800 level. As at London market opening times, the GBP/USD is trading at 1.2760.

USD/JPY rejected at 109.00, retreats below 108.00. The US dollar failed to extend its recovery above 109.00 and retreated below 108.00 weighed by the dovish Fed minutes and the lower optimism about the US – China trade talks. As at London market opening times, the USD/JPY is trading at 107.85.

In the Calendar Today

Today, in the Eurozone, the European Central Bank will release the minutes of the last monetary policy meeting. The Bank has ended its bonds purchasing program in December, and the market will be eager to know more about the bank’s monetary tightening calendar. Anything new in that point is likely to have a relevant impact on the pound.

In the US, the focus will be on Fed Powell’s speech. Again, his comments about the economic perspectives and the bank’s plans to react to an economy that might be growing at a slower pace might have some effect on the USD.

12:30 GMT     ECB: Monetary policy meeting accounts

 17:00 GMT     Fed: Powell’s speech

 

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