Fed minutes trigger greenback gains

The FOMC minutes set the scene for a firmer greenback and helped the currency extend its gains from earlier in the week.

Federal Reserve
Source: Bloomberg

While the Fed’s minutes essentially took June rates lift-off possibility off the table, the US dollar still managed to rally against the majors. Essentially, the Fed said it will not be hiking until it has clarity on how a mixture of transitory and longer-lived factors are influencing growth factors. USD/JPY is the pair to watch at the moment after a long period of consolidation hinged on the ¥120.00 handle. However, the pair has since rallied through ¥121.00 and managed to print a high of ¥121.48. A downtrend that’s been in place since March 10 highs has also been broken now and this could give the bulls fresh impetus to drive the pair higher. Initial resistance for any longs will be in the ¥122.00 region which is where March highs kick in. Once that level is cleared, it’ll all be about momentum plays with trailing stops being the best way to play the pair. The Bank of Japan meeting and press conference will be the next key event risk for the pair.



Click to enlarge

IGA, may distribute information/research produced by its respective foreign marketing partners within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.