- EUR/USD drops to 1.1080 but quickly rebounds back to 1.1100 on Fed’s minutes.
- FOMC minutes show some members wanted to keep rates on hold.
The EUR/USD pair dropped to 1.1080 after the released of the Fed’s minutes from the latest meeting but it quickly rebounded, rising back to the 1.1100 area. The greenback spiked higher after the document was published but then pulled back to the previous trading range.
Fed minutes add no new information
The minutes showed that at the July meeting, when the central bank lowered the Fed Funds rate, a number of officials stressed the need for flexibility. Two of them would have preferred a larger rate cut, of 50 bp while “several” favored keeping rates on hold; among them, a few expressed concerns that a cut could be misinterpreted as a negative signal about the state of the economy. While on the other side, those who favored a cut mentioned a decelerating economy and elevated risks on the global economy and inflation.
The reaction in markets was limited. The US Dollar initially rose but it quickly pulled back to the level it has before the meeting. Now attention turns to Jerome Powell speech on Friday.
EUR/USD continues to consolidate
The Euro moved on Wednesday within yesterday’s range versus the US Dollar. It is hovering around 1.1100, moving between 1.1085 and 1.1105. Those two levels are critical in the very short-term. Above the next resistance levels are seen at 1.1115 and 1.1140. On the flip side, below 1.1085, the next support is 1.1060 that protects the YTD low at 1.1025.