EUR/USD trades in tight range as Fed minutes reveal growth worries
USD/CAD pushes to new highs, testing critical resistance levels. Yen manages to eke out small 30-day advance against greenback.
The euro traded in an extremely tight range against the US dollar on Wednesday, showing little reaction to the release of the US Federal Reserve (Fed) minutes of its policy making committee meeting from late October.
The Fed meeting minutes revealed that US monetary policy makers had significant concern over the health of the US economy. A majority of the committee voted to ease interest rates, cutting the official overnight Fed Funds interest rate for the third time this year.
What has been propping up the greenback since then, however, is that the Fed signaled it would be pausing its interest rate easing efforts to ascertain their impact on the economy, leading the markets to assume that US rates will likely remain stable well into next year. Futures and swaps markets are pricing in a quarter point Fed easing in the third quarter of next year.
The US dollar has thus generally been strong in recent weeks, with the Yen the only major currency to gain against the greenback, a small 30-day advance of just 0.14%.
EUR/USD was trading around $1.1075 in late New York trade, little changed from sessions earlier this week.
USD/CAD testing key resistance
The greenback back continued to advance strongly against the Loonie Wednesday, resuming a rally began Tuesday after a speech by the Bank of Canada’s (BoC) deputy governor was interpreted as dovish for Canadian monetary policy.
The BOC has stood on the sidelines as the Fed has eased this year, leading to relatively higher Canadian interest rates that have supported the Loonie, which is up over 3% against the US dollar since January.
USD/CAD tested key resistance levels near $1.33 several times during Wednesday’s New York session and was again trading near there in early Thursday Asia trade.
IGA, may distribute information/research produced by its respective foreign affiliates 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.
The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. 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, and 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.
Please see important Research Disclaimer.
Start trading forex today
Trade the largest and most volatile financial market in the world.
- Spreads start at just 0.6 points on EUR/USD
- Analyse market movements with our essential selection of charts
- Speculate from a range of platforms, including on mobile
Live prices on most popular markets
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.