The EURUSD traders were looking forward to the FOMC minutes which is the first of the big economic events that are scheduled to be released this week. The traders were expecting a lot from the FOMC minutes and hoping for some solid clues on when the next rate hike can be expected and how the Fed plans to go about with balance sheet trimming but as with most eagerly anticipated economic events, it turned out to be a damp squib.
EUR/USD Isnt Affected by FOMC
It is the knack for markets and events to always be at odds with each other. Many a time, we see certain non- events bringing about huge surprises and moving the markets a long way while those events that are anticipated much ahead of time and which markets await with bated breath and even overrun the events n anticipation of large moves, turn out to damp squibs at the end. Yesterday’s FOMC minutes was one such event. The market was anticipating it right from the beginning of the week and even started buying the dollar in the hope of something hawkish from the minutes.
But the Fed members continued to be divided on when the next rate hike would be and also on how they are going to trim the balance sheet. All in all, there was nothing special in the minutes and nothing that was not already known. So, the dollar, though it strengthened a bit, did not go in any specific direction and ultimately just managed to stay where it was. Even at the end of the minutes release, the market still isnt very sure on when the next rate hike would be, and as usual, we believe that the Fed would watch the incoming data to determine that.
Looking ahead to the rest of the day, we have the ADP Employment change, the PMI data and the oil inventory data from the US later in the day and with the weak employment data from last month and with the ADP data acting as a precursor to the NFP tomorrow, this piece of data would be watched very closely and would bring in a lot of volatility in the markets.
This article was originally posted on FX Empire