Euro Stable as Market Waited for Draghi’s Speech and Fed’s June Minutes

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Euro Stable as Market Waited for Draghi’s Speech and Fed’s June MinutesThe euro remained steady versus the dollar on Wednesday as traders awaited European Central Bank Mario Draghi’s speech and the minutes of a June meeting of the Federal Reserve.

The market is keenly monitoring any signs that the Fed may hike interest rates next year, which is expected to push up the yields of U.S. bonds, as well as the dollar.

“It’s really been very quiet,” Daragh Maher, a strategist with HSBC told Reuters Monday. “With the minutes today Janet Yellen was reasonably dismissive after the meeting of any upside threat in inflation, so it will be interesting to see if that mood is the same with others at the Fed.”

The dollar was trading slightly higher at 80.214 and remained slightly unchanged versus the euro at $1.3609. It also accelerated versus the yen to the point last seen before upbeat U.S. jobs data was released last Thursday. It traded at 101.69 yen today.

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The New Zealand dollar also traded close to a 3-year high of $0.8819 in the early morning trading due to a credit rating upgrade on Tuesday. The New Zealand currency has advanced about 9 percent since the start of the year due to the steady increase in local interest rates. New Zealand is also the only advanced economy where interest rates have been increasing.

The kiwi surpassed the $0.8714-0.8795 range touched recently after Fitch Ratings upgraded New Zealand’s AA- outlook to positive from the previous stable rating, pointing to progressive fiscal consolidation. The kiwi is also being propped up by its yield advantage that is expected to increase this July when the Reserve Bank of New Zealand is widely forecasted to hike its cash rate to 3.25 percent. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.

To contact the reporter of this story; Yashu Gola at yashu@forexminute.com