Dollar Lower After Fed Minutes

The dollar dropped off against most of the majors last night after Fed minutes gave a more cautionary view of the market that many participants were expecting. We saw the Dxy fall off from a high around 96.50 earlier in the day to finish the session around 96.20.

It was a relatively quiet and range bound day ahead of the Fed minutes with the currencies sticking to the recent ranges with some pressure on the commodity currencies, Aussie remains under pressure after a disappointing RBA meeting and the Cad as the Oil price took a bit of a hit during the London session.

Looking ahead to today and we’ve already seen signs that the market is focusing on Friday’s Non Farm Payrolls number with the range bound conditions, however we do have some significant event risk ahead with data releases in the sessions leading up to it. In Asia today we have the Australian Trade Balance data and traders will be watching this to see if it backs up the RBA’s static meeting.

Into Europe and the ECB’s Monetary Policy Meeting Accounts will be out at 9.30 pm with traders keenly analsying these in the light of the ‘Hawkish’ indications we got from the president last week. But the main risk today once again comes in the New York session with a raft some crucial pieces data due. Starting off with the ADP Non Farm data, this has a high correlation with the big number on Friday and traders will be hoping for a good indicative number – expected 184k. We then have the Canadian Trade Balance and weekly US employment data at the same time, followed by the more important ISM Non Manufacturing PMI.

Once these are out of the way, we should see the market settle into relatively quiet ranges as traders prepare for the big Non Farms data tomorrow night.

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