Dollar Recovers after Fed Minutes

USD

On Thursday, the Greenback inched higher and traded near one-and-a-half week highs vs. a basket of major currencies following overnight gains after the minutes of the Federal Reserve's January meeting went against expectations for faster rises in U.S. interest rates. The minutes showed that Federal officials see rising inflation and increased economic growth as justification to continue to raise interest rates gradually.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down by 0.07% at 89.96.

EUR

The Single currency rose slightly by 0.07%, to settle at $1.2292. On the release front, traders are awaiting the ECB Publishes Account of Jan. 24-25 Policy meeting.

GBP

The Sterling pound fell by 0.16%, to a one-week low of $1.3896. On the release front, traders are awaiting Gross Domestic Product, which is expected to hit 1.5%.

JPY

Against the JPY, the USD fell by 0.35%, to settle at ¥107.39, as investors piled into safe-haven assets. On the release front, traders are waiting JPY National Consumer Price Index (YoY) (JAN), rising CPI could prompt the Bank of Japan to hike interest rates in order to manage inflation and slow economic growth.

Gold

Early on Thursday, Gold prices edged lower to one-and-a-half week lows, after the minutes of the Federal Reserve's latest policy minutes pointed to the need for further interest rate rises, sending the USD higher. Gold Futures - Apr 18 (GCJ8), fell by 0.03%, to settle at $1,330.80.

Oil

Oil prices declined, as a firmer dollar outweighed a report of a decrease in U.S. crude stockpiles. Since oil is priced in dollars, an increase in the USD makes fuel imports for countries using other currencies domestically more expensive, potentially curbing demand.Crude Oil WTI Futures - Mar 18 (CLH8) fell as much as 0.65%, to settle at $61.28, and Brent Oil Futures - Apr 18 (LCOJ8) was down by 0.47% at $65.11.

The most important economic events:

GBP Gross Domestic Product (YoY) (4Q P): (09:30) – Important – Forecast (1.5%) – Previous (1.5%).
EUR ECB Publishes Account of Jan. 24-25 Policy meeting: (12:30) – Important
JPY National Consumer Price Index (YoY) (JAN): (09:30) – Important – Forecast (1.3%) – Previous (1.0%).

Disclaimer
The prices and news mentioned in this outlook are absolutely no guarantee of future market performance and do not represent the view of ICM Capital Limited. Financial markets can move in either direction causing profits to be made or complete losses to be incurred by the trader. Each trader must decide for themselves what their risk appetite is and ensure that correct risk management procedures are in place before placing any trades.

ICM Capital Review