We had a bit more of a mixed bag again from the Usd last night as initially we saw a continuation of the dollar grinding higher but this was followed by a drop down after the Fed minutes were released. They showed that there is much more caution in the Fed’s approach than we have been led to believe by recent comments from Fed members and indeed from what we heard from in Janet Yellen’s testimony last week. Using the term ‘fairly soon’ as to when they should raise rates and if jobs and inflation data came into line with expectations. To me this leads much more credence to the recent market moves rather than if it had been blindly following Fed guidance… Market 1 v 0 The Fed.
Elsewhere in the market, the French election is starting to make more and more headlines as political parties are looking to make alliances in a political game of cat and mouse. In the present environment, any perception that Le Pen could become the next president tends to put pressure on the Euro and any news hurting his chances bringing relief for the single currency.
Poor Core retail sales data out of Canada also hit the Cad hard overnight coming out at -0.3% against expectation of 0.8%.
Looking ahead to today, there’s quarterly CapEx data out in Australia during the Asian session and final German GDP numbers out in Europe but it’s thin on the ground in terms of fundamental data until we get the weekly Unemployment numbers and Crude Oil Inventories in the US session.
Once again, I think the details from those minutes add to the uncertainty in the states rather than clarify anything and all this is making the Trump government’s communication and his State of the Union address more and more relevant for the next moves in the US dollar. Until we get that certainty then funds will continue to move to the ‘havens’ of Gold, Jpy and Chf.
Good Luck today!