U.S. dollar had a strong weakness as FOMC minutes showed concerns over weak inflation and drove the USD/JPY pair to a two-month low below our recommended target. ECB monetary policy accounts is the major event in European session while the EUR/USD pair is trading higher since yesterday. In the U.K., the GDP Q3 will be announced.
ECB monetary policy meeting accounts will be the main focus of the day. It is stated that European Central Bank would start reviewing the asset purchase plan that is going to half the monthly size to 30b, running from January to September. Over yesterday’s trading period the euro traded sharply higher against the U.S. dollar during the release of the FOMC minutes that hold under pressure the greenback. Also, Eurozone’s preliminary consumer confidence index rose to 0.1 in November, nearly a 17-year high.
The U.S. dollar plummeted aggressively against all the G10 peers as the FOMC minutes for November emphasized on the worry of ‘several’ member about the weak inflation that would be persistent, rather than temporary. A significant message that reported in the minutes is that a December rate hike is almost a deal with ‘many’ members judging that it is ‘warranted in the near term’ if the macroeconomic data remain steady. All traders turn their attention on December’s rate hike.
Read the full financial markets daily report on JFD Research.