Greenback Trades Higher ahead Fed Minutes

The U.S dollar has been changed a bit against other trade-weighted basket of major currencies on Wednesday, as investors  were looking ahead to the minutes of the Federal Reserve’s  latest policy meeting which were due for publication at 14.00 ET (1800 GMT), with hopes for further indications on the pace of the future rate hikes.

Fed Minutes Outlook

"Expectations that the Fed will hike next month are also supporting the dollar. Though a hike is not a done deal, it is still widely expected," said Mitsuo Imaizumi, Tokyo-based chief foreign-exchange strategist for Daiwa Securities.

USD/JPY declined to 0.03% or 111.81, while USD/CHF was little changed at 0.9763.

Vamvakidis said that the US dollar may be supported by Philadelphia Fed President Patrick Harker, a voting member of FMOC, who has shown his full support for two or more rate hikes this year. He even said that the hike this June was a “distinct possibility”.

In addition, according to CME Group Fed Watch program, traders saw a chance of about 80% that the U.S bank would increment rates at its June meeting.

"Perhaps given that the FOMC (Federal Open Markets Committee) was relatively hawkish, saying that the weakness we had seen in the data was temporary, the market might expect the minutes to be on the hawkish side," said Athanasios Vamvakidis, currency strategist at Bank of America in London.

The Dollar Index opened 0.5% higher but is now 0.4% lowers, at 97.32. Traders are eager to see whether the dollar will resume yesterday’s 0.33 percent rise after 7 of 8 sessions recorded a decline of 2.70%.

However, the index hit 96.83 on Monday, the lowest trough since November, having exerted all the gains following the controversial U.S presidential election, which suspected Trumps for attempting to interfere in judicial process and for having links with Russia.

Against the basket of currencies

Investors were also still grasping the Manchester terrorist attack at a concert packed venue that killed 22 people on Monday evening.

GBP/USD decreased by 0.05% or 1.2965

EUR/USD held steady at 1.1194 by 12:57 GMT.

Meanwhile, USD/CAD was steady at 1.3504 by 13:02 GMT.

Also, on Wednesday, Moody’s Investors Services lowered China’s long-term and foreign currency issuer rating by one notch to A1 from Aa3, building anticipation that the world’s second biggest economy would grind down in the coming years.

China's offshore yuan slipped in a knee-jerk reaction but the overall response was limited. The yuan fell to 6.8902 per US dollar, down by 0.1%.

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Greenback Trades Higher ahead Fed Minutes Greenback Trades Higher ahead Fed Minutes Reviewed by Trade12 Reviews on 7:24 AM Rating: 5

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