The most volatile currency on Wednesday was the U.S. dollar, as expected. USD/CAD plunged due to a sharp increase of the oil and the dovish FOMC minutes while the euro and the British pound ended the day near their opening levels against most of the majors.
U.S. Dollar Declined Following FOMC Minutes
The FOMC minutes failed to support the U.S. dollar which declined against all its major counterparts on Wednesday and early Thursday. The policymakers do not expect hurricanes to impact the economy on the long term, however, many of them expressed their concerns that the low inflation figures this year, might affect other factors of the economy, including development. A few of them added that “no further increases in the federal funds rate were called for in the near term or that the upward trajectory of the federal funds rate might appropriately be quite shallow.” On the other hand, the other lawmakers argued that “an unduly slow pace in removing policy accommodation could result in an overshoot of the Committee’s inflation objective in the medium term that would likely be costly to reverse or could lead to an intensification of financial stability risks or to other imbalances that might prove difficult to unwind”. In addition, another job report published by the Bureau of Labor Statistics revealed that JOLTS Job Openings were 6.082M in August below market expectations of 6.125M and 6.140M the previous month. Later in the day, the U.S. retail sales and PPI will be eyed, while traders are expecting the CPI report on Friday to gauge the slow down mentioned in the FOMC minutes.
Read the full financial markets daily report on JFD Research.