Wall Street moved higher after the release of FOMC minutes with Asian markets following cues in the morning session. Asian markets are trading positive
The Central Bankers also affirmed that only a gradual rate hike is appropriate amid weak economic activity abroad. This dovish release of meeting minutes gave a boost to US equities which led to S&P 500 closing at a seven-week high. All the above factors acted negative for the US Dollar Index. US Dollar Index made an intraday low of 95.08 and closed at 95.41 on Thursday and drifted down to 95.33 in the morning session.
The euro is trading at 1.1260 after soaring above 1.13 late on Thursday. The euro strengthened by 0.4 percent yesterday owing to the release of Federal Open Market Committee’s meeting minutes that was dovish. The US policymakers stated that due to risky outlook for economic activity and inflation it was prudent to adopt wait-and-watch method before raising interest rates. This lent support to the shared currency owing to a delayed interest rate hike expectations.
Thursday’s ECB Monetary Policy Meeting minutes the policymakers stated that expectations of a gradual recovery remained “fundamentally unchanged”, despite the ongoing Chinese concerns. However, the Central bankers wanted more time to decide whether to increase the stimulus program because the region’s economic recovery looked strong enough to shake off global market turmoil. This kept the euro currency supportive. The currency made an intraday high of 1.1324 and closed at 1.1278 on Thursday.
There was little of major importance on the economic calendar is the Asian session with both the Aussie and the kiwi trading in the green. The Aussie moved to 0.7278 while the kiwi gained 7 points to 0.6674 as commodities rebounded a bit and global fears eased.
The Japanese yen eased a bit on Friday morning as safe haven trades moved back a bit. The USDJPY is holding at the midpoint in its 2 month trading range at 119.97 and the EURJPY is at 135.32. The Japanese yen appreciated by 0.08 percent yesterday after the disappointing release of meeting minutes from the US Euro-zone and UK that had a hint of dovish stance. The policymakers blamed global economic slowdown and low inflation for the same. This prompted the traders to be in risk-off mode thereby boosting the demand for safe haven yen. The currency made an intraday high of 119.60 and closed at 119.91 on Thursday. On Wednesday the dollar slipped slightly against the yen after the Bank of Japan left monetary policy steady despite talk the central bank would ease. The dollar was last down 0.2 percent against the yen at 120.005.