Become a client

Currency Market Analysis

Jul 07, 2021 | Currency Market Analysis

Global Themes

USD snaps back as focus turns to Fed

The US dollar rebounded overnight ahead of tonight’s release of the US Federal Reserve minutes.

The USD index returned to three-month highs last night weakening after Friday’s jobs report.

FX markets clearly favoured safe haven currencies with the US dollar and Japanese yen higher.

The euro was weaker as it hit three-month lows.

AUD weaker post RBA

The AUD was mostly weaker after the Reserve Bank of Australia said it would moderately wind back its massive stimulus program.

However, the RBA remains more dovish than other key central banks and continues to believe official rates will remain at current levels until 2024.

The RBA introduced a “taper” by winding back its weekly bond purchases from AUD5b per week to AUD4b per week.

Fed minutes in focus

The Fed minutes, due at 2.00am, will be the highlight with the most recent meeting having a seismic impact on markets by bringing forward forecasts for its first rate hike to 2023.

Otherwise, updated forecasts from the Eurozone and the US’s job opening data will be the other key announcements today.

Get the daily currency market analysis in your Inbox

Published five days a week, this newsletter provides day-to-day trends and activities affecting the market in easy-to-understand snapshots.