US Dollar Rallies, Later Retreats, as Markets Await Release of FOMC Minutes

The US dollar rallied against its main peers today as markets await the release of minutes of the Federal Open Market Committee scheduled for later today. The US dollar gained significantly against its main peers for the fourth consecutive session even as the National Association of Realtors reported higher than expected figures for January home sales.

The US dollar rallied to new highs as tracked by the US Dollar Index, which hit a high of 101.72, but had retraced most of its gains to trade at 101.43 as at the time of writing.

The US dollar rallied higher today after thee NAR reported that home sales for January had risen by 3.3% beating expectations against the backdrop of higher home prices and mortgage rates. The greenback also shrugged of the cautious market sentiment towards US bonds even as bond yields declined disregarding the US dollar rally.

The US dollar was also affected by market expectations of the release of FOMC minutes as the market seemed to have priced in the Fed’s hawkish tone expecting the minutes to confirm the same and the potential for a March rate hike.

The release of initial jobless claims data for the week ending February 18, and the house price index, both scheduled for tomorrow, are likely to affect the greenback’s performance.

The USD/JPY was trading at 113.46 as at 17:44 GMT having hit a daily low of 112.88 before recovering during the American session. The GBP/USD pair was trading at 1.2444 having hit a daily high of 1.2508 during the European session.

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