FOMC minutes were a non-event as USD sticks to narrow ranges

Published date: 11/04/2019

Last night's FOMC minutes were scrutinised for any hints of policy thinking which may have been missed at the meeting and press conference a few weeks back.  However, the main takeaways were that Fed policymakers continue to see rates on hold through the year, though there could be circumstances where they may be a need to tighten again.  This was purely academic, so the market ignored this, with rates and yields little changed - and hence the USD also.  

To add to the neutral tone, Fed members saw the neutral rate moving either way from current levels, so this underlined the status quo, with data dependency the name of the game and we have seen a mixed bag of late, though softer wage growth could be an issue going forward.  We only have weekly jobless claims to consider in this respect, though only a material deviation in the weekly and monthly averages will see the market reacting to this data. 

EUR/USD continues to be trapped against limits seen ahead of 1.1200 and 1.1300.  USD/JPY is also showing its usual resilience to the downside, with the dip under 111.00 paid up again as risk sentiment has once again steadied and US Treasury yields little changed on the week.  

US PPI this afternoon is unlikely to provide any leads for traders to go off, but what is notable is that USD gains are proving limited from current levels, though tight price action this week shows that the market is reluctant to abandon USD outperformance for now - hence low volatility.


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