US Dollar Rises ahead of FOMC Minutes
The US dollar rose against its major trading partners early Wednesday, except for a decline versus the yen, ahead of the release of housing starts data for January and the New York Federal Reserve’s services index reading for February.
The dollar continued its rebound yesterday, although early trading today is favouring some momentum in the yen and Antipodeans, ING said in a note. Analysts said the markets will continue to carefully assess how close a truce in Ukraine is, and crucially at what conditions.
Russia and the US have held bilateral discussions that have excluded both Ukraine and the EU. Hints at future Moscow-Washington cooperation can reinforce the notion of isolation for Europe from a defence and economic perspective and contribute to a rotation away from European currencies into safe haven USD and JPY.
That has also been helped by President Donald Trump floating the idea of 25% tariffs on US auto, drug, and chip imports overnight, according to ING note. Minutes of the Federal Open Market Committee’s Jan. 28-29 meeting are due to be released, and Fed Vice Chair Philip Jefferson is scheduled to speak.
A quick summary of foreign exchange activity heading into Wednesday showed that USDEUR fell to 1.0424 from 1.0447 at the Tuesday US close and 1.0463 at the same time Tuesday morning. The Eurozone current account surplus widened in December, data released earlier Wednesday showed. The next European Central Bank meeting is scheduled for March 5-6.
GBPUSD fell to 1.2581 from 1.2607 at the Tuesday US close and 1.2605 at the same time Tuesday morning. UK consumer prices declined in January but the year-over-year rate accelerated for both the overall reading and the core measure, according to data released overnight. The next Bank of England meeting is scheduled for March 20.
USDJPY fell to 151.7863 from 152.0351 at the Tuesday US close and 151.8480 at the same time Tuesday morning. Japanese business sentiment improved slightly in February while the trade deficit widened in January, according to data released overnight. The next Bank of Japan meeting is scheduled for March 18-19.
USDCAD rose to 1.4213 from 1.4189 at the Tuesday US close and 1.4197 at the same time Tuesday morning. There are no Canadian data on Wednesday’s schedule. The next Bank of Canada meeting is scheduled for March 12. #US Dollar Rises ahead of FOMC Minutes Naira Rises to N1,510 after $181mn FX Sales to Banks
