The March FOMC minutes are up for release in today’s New York trading session and dollar bulls are hoping that this might put the currency back in rally mode. The safe-haven dollar has recently lost a lot of ground to its major forex counterparts because of the weak NFP report for the same month, as the figure showed a 192,000 increase in hiring instead of the estimated 200,000 gain. This was not enough to push the jobless rate down from 6.7% to 6.6% as many had hoped but it was enough to put the US back above pre-recession levels when it comes to total employment.
During the March FOMC monetary policy statement, Fed Chairperson Yellen announced that the US central bank plans to carry on with its taper of $10 billion in asset purchases per month as the economy continues to show signs of a recovery. The latest NFP disappointment led some to believe that the Fed might pause with its taper.
March FOMC Minutes To Revive USD
During that Fed statement, Yellen was also quoted saying that the Fed might consider hiking interest rates six months after asset purchases end. This was very bullish for the US dollar at that time but the gains were not sustained since US data following that failed to impress.
Take note though that the FOMC minutes were made prior to the release of the bleak US figures for the March period. This might sound hawkish and provide a momentary boost for the US dollar but it remains to be seen whether the gains could be sustained or not since these depend mostly on economic data.
If you plan to trade this event, make sure that you’re ready for extra volatility. Other Fed officials are not so supportive of the Fed’s plan to remove stimulus so dovish remarks might still be seen in the FOMC minutes.
To contact the reporter of the story: James Brennan at firstname.lastname@example.org