USD - United States Dollar
Demand for the euro picked up steadily against the US dollar and other major currencies after the European Central Bank announced a new inflation target of 2%. EURUSD was up 0.57%, trading back above 1.18 at the time of writing.
Yesterday’s Federal Open Market Committee (FOMC) confirmed more optimism over the economic outlook.
The Fed minutes revealed that there was debate among Fed officials over how soon they would have to start easing stimulative monetary policy. But the message to see “substantial further progress” on the economic front mirrored policymakers’ recent “wait and see” stance. Overall, officials were upbeat about economic recovery, accepting that “indicators of economic activity and employment had strengthened” and even parts of the economy most impacted by COVID-19 “had shown improvement”.
The US Dollar Index was down 0.39%, trading at 92.27 this morning. The index, which measures demand for USD against a basket of major currencies, hit multi-month highs around 92.80 on Wednesday following the release of the FOMC minutes.
The pound remained on the back foot against the US dollar. The FOMC meeting minutes sent GBPUSD trading back below 1.38. Without any significant data releases scheduled this week, it seems to be a case of sterling trading sideways with the majority of its peers. Events that could trigger volatility for the pound include the Bank of England’s quantitative easing program, the interest rate hike decision due on 5th August, economic forecasts, Brexit trade negotiations, and COVID-19.
A buoyant US dollar saw the Australian dollar, New Zealand dollar and Canadian dollar trade lower this morning.
1.1786 - 1.1866 ▲GBP/USD:
1.3743 - 1.381 ▼AUD/USD:
0.7417 - 0.7502 ▼