- Forex today was bouncing between Fed noise and Sino/US trade headlines which combined made for a weaker dollar while risk apatite reigned.
The greenback dropped from the proximity of the 96 handle to a low of 95.12 following Fed speakers and the FOMC minutes which combined, underpinned the market's expectations for a more cautious approach to the rate hike cycle from the Fed.
First up we had Fed's Bullard, Bostic, Evans and Rosengren all speaking various times throughout the day, arguing the case for a pause although not all as dovish as one another. Evans, for example, expects as many as three hikes in 2019, although also said that the "Fed has the capacity to wait and take stock of incoming data". The FOMC minutes echoed such sentiment when reading, "Many officials felt Fed could be patient on further hikes". This, alongside the generally positive conclusion to US-China trade talks, helped support risk assets such as oil which stood out as the top performer with WTI rising 4.6% on positive trade headlines and as Saudi Arabia reaffirmed its commitment to curb output.
EUR/USD rallied from the 1.1450s a cent higher through a key Fibo and thin cloud resistance and was ending North American trade close the highs. Cable also send the sessions close to its highs of 1.2804, getting a late boost in early Asia on Brexit noise. On the count down to the meaningful vote next week, the main opposition Labour Party leader Jeremy Corbyn is to give a speech on Thursday and is expected to repeat "If the government cannot pass its most important legislation, then there must be a general election at the earliest opportunity". USD/JPY fell victim to the broad dollar sell-off and an increase in risk appetite, falling from the 109 handle to a low of 107.97 at its worst levels before closing at 108.17. As for the Aussie, it failed to get over the line, albeit propelled higher on the day following positive momentum headlines with regards to US and China trade talks, also taking its cues from the bearish dollar sentiment. The pair ended New York at 0.7171, down from a session high of 0.7194.
Key notes from US session:
Key events ahead:
- CPI expected 2.1%, prior 2.2%
- PPI expected 1.6%, prior 2.7%