Yesterday, the minutes from the latest FOMC meeting revealed that all policymakers agreed that the economic outlook has strengthened, and that they expect inflation to rise in coming months. As for today, investors will turn their attention to the ECB minutes in order to get more clues on how strong the likelihood for a QE end this year is.
Fed Officials See Stronger Economy and Inflation
The dollar ended the day lower or unchanged yesterday against most of the other G10 currencies, despite the upbeat tone in the Fed minutes and earlier data showing that inflation accelerated in both headline and core terms. It was higher only against SEK and CHF, while it underperformed the most versus NOK, NZD and JPY in that order. The greenback traded virtually unchanged against EUR, GBP and AUD.
Yesterday, the FOMC released the minutes of its latest gathering, where the Committee increased interest rates by 25bps, but disappointed those expecting to see the 2018 “dots” signaling 4 hikes by year end. As we already noted, the overall view and narrative of the Fed was optimistic at that gathering, but the market preferred to focus on the dots.
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