Forexlive Americas FX news wrap: FOMC meeting minutes are more hawkish

Forexlive Americas FX news wrap: FOMC meeting minutes are more hawkish

Forex news for NY trading on April 11, 2018

Intro Paragraph Text Here.

In other markets today the snapshot near the end of the day is showing:

  • Spot gold is trading up $12.83 at $1352.28. It was up as much as $25 but backed off into the close.  
  • WTI crude oil closed sharply higher on mideast tension. The contract is trading up $1.29 or 1.97% at $66.80
  • Bitcoin had another quiet day. It trades up $63 ro $6904.  For a technical look at the biggest of the digital currency, CLICK HERE

US stocks end lower:

  • S&P fell -14.68 points or -0.55%
  • Nasdaq fell -25.27 points or -0.36%
  • Dow fell -218 points or -0.90%

The US yields were lower but off the lowest levels for the day:

  • 2 year 2.304%, down -0.4 bps
  • 5 year 2.6113%, down -1.3 bps
  • 10 year 2.777%, down -2.3 bps
  • 30 year 2.99%, down -3.1 bps

Today, US CPI came in lower than expected on a MoM basis (-0.1% vs 0.0% expected) but because the value was down more a year ago, the YoY numbers came in higher vs last month at 2.4% vs 2.2% last month. It was the one year high.   

The issue with the number is that although at a high, it is largely a fait accompli that inflation rises this year from last year – simply from lower values from last year, dropping out this year.

Nevertheless, later in the day when the FOMC meeting minutes were released, the Fed did acknowledge that 

  • inflation was unanimously expected to rise in the next few months, 
  • that 1Q growth softness was likely to be transitory
  • Outlook warranting a steeper rate path
  • risks from prolonged above trend growth
  • Sees no big growth impact from steel/ aluminum tariffs
  • Sees significant fiscal policy growth boost over the next few years

However, they also thought:

  • gradual rate hikes still appropriate (although they may extend longer than expected)
  • Wage growth was moderate
  • Saw risks from trade war

Overall, the market saw the headlines as being more hawkish off the headlines but when the EURUSD and the USDJPY hit technical targets (
see post here), the dollar rise fizzled and the prices moved back toward whence it was prior to the minutes.   

In other news today:

That news certainly caught the attention of gold buyers. It was up $25 at the peak but came off into the close.  Yields in US debt were also lower on the flight into the safety of those issues.  

The JPY caught a flight to safety bid. It was the strongest currency of the day. Although the CHF ended as the weakest currency today. The USD ended in the middle with mixed results. It was higher vs the CHF, AUD and NZD, but down vs the JPY, CAD (
the loonie was helped by technicals and the price of oil), and EUR. The GBPUSD was near unchanged on the day. 
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