Adding some confusion to the US dollar’s direction, the FOMC minutes yesterday were mixed. While the minutes reinforced the caution Yellen mentioned in her speech, there were hawkish undertones among the Fed as a whole. Several members wanted a rate hike this month and are not 100% behind Yellen’s new focus on global concerns. The dollar got stronger immediately after the release of the minutes but quickly tapered off and went into the red as the Fed’s dovish position was confirmed and a rate hike this year is now in question.
The dollar is stronger this morning however after Mr. Draghi and ECB stated that they are looking at potentially even more quantitative easing measures. Draghi, in writing the bank’s annual report, said they won’t “surrender” to very low price growth. The only currency the dollar hasn’t gained against is the Japanese Yen which has skyrocketed today to levels not seen since October 2014. Most of these gains have come on the back of movements in the bond market that suggest liquidity issues. Tohru Sasaki, a former BOJ official, says the government will be reluctant to try and intervene in the markets again as their current attempts don’t seem to be working.
EURUSD: Euro is down this morning after Draghi said that they ECB is considering more stimulus.
GBPUSD: The pound is down after a slightly more hawkish than expected FOMC minutes.
AUDUSD: Aussie dollar is down this morning as metals and other commodities struggle and fall.
USDCAD: Canadian dollar slightly weaker as oil loses some gains this morning.