Currency Market Analysis

Apr 08, 2021 | Currency Market Analysis

Global Themes

Greenback rebounded after Fed minutes

The US dollar was higher after last night’s Federal Reserve minutes were unable to provide support to sentiment that has recently been shaken by higher US bond yields.

While the Fed continues to say it will keep rates low for a sustained period, the minutes focused on an improving US economy, particularly in the consumer sector, and this caused yields to inch higher after the announcement.

The Fed also noted that inflation was currently above its expectations although the US central bank continues to signal that it believes the pick-up in price pressures will be only short-lived and “transitory”.

Commodities lower

The minutes boosted the US dollar.

The USDSGD gained 0.1%.

The euro and Japanese yen both gained.

The AUD was hit by falls in commodity markets following the minutes. Gold was down 0.2% while copper fell 1.4%.

Confidence counts

Today’s early focus is on New Zealand sentiment with business confidence due.

Later, the European Central Bank minutes are due at 7.30pm.

The Fed remains in focus with chairman Jerome Powell speaking to the International Monetary Fund at midnight.

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