US Dollar Ends Wednesday Soft Despite CPI, FOMC Minutes

The US dollar ended Wednesday’s trading week in red basically across the board. That is surprising considering that domestic fundamentals look positive for the US currency.
The US Bureau of Labor Statistics reported that the Consumer Price index rose 0.4% in March, exceeding the median forecast of 0.3%. But the core CPI was up by just 0.1%, the same as in February and missing the average projection of a 0.2% increase.
The minutes of the Federal Open Market Committee March monetary policy meeting confirmed that most of the participants expected interest rates to stay unchanged throughout the year:

With regard to the outlook for monetary policy beyond this meeting, a majority of participants expected that the evolution of the economic outlook and risks to the outlook would likely warrant leaving the target range unchanged for the remainder of the year.

In fact, some even thought that an interest rate cut is not out of the cards:

Several participants noted that their views of the appropriate target range for the federal funds rate could shift in either direction based on incoming data and other developments.

Yet there were those who thought that hikes may still be prudent this year:

Some participants indicated that if the economy evolved as they currently expected, with economic growth above its longer-run trend rate, they would likely judge it appropriate to raise the target range for the federal funds rate modestly later this year.

EUR/USD near the Wednesday’s settlement of 1.1272 as of 22:21 GMT today after opening at 1.1263 and falling to the daily low of 1.1230 on Wednesday. GBP/USD rose from 1.3051 to 1.3091 and touched the high of 1.3122 intraday. USD/JPY slipped from 111.14 to 110.96.

If you have any questions, comments, or opinions regarding the US Dollar, feel free to post them using the commentary form below.

Leave a Reply

Your email address will not be published. Required fields are marked *