The Euro continued its positive gains into the start of Wednesday, posting about a 1% gain to 1.1573 to start the day. Again, the catalyst was off-shore forces however, with little to drive the Euro domestically. It was of course the Greenback that drove the momentum shift, as it found itself losing ground across the board on the back of comments from President Trump.
Comments from President Trump were again the primary concern for markets overnight with his latest salvo at the Fed well and truly in the spotlight. His criticism of Fed Chair Powell and the Fed’s Interest Rate hikes dominated market sentiment with the USD falling across the board. While the Fed is an independent institution there are concerns that Trump could promote more dovish Governors to the four empty seats at the Fed. With the gloss on the USD slightly tarnished, risk sentiment returned to the market with flows moving to a number of risk-aligned currencies, including the Euro. Closer to home, EU Chief Brexit Negotiator, Barnier, said negotiations were entering their final stage and discussions would occur continuously from now on.
Wednesday otherwise proves to be another quiet day on the domestic economic calendar. Attentions will now turn to the FOMC meeting Minutes for direction.