Yesterday, the Federal Reserve Bank released the minutes from June’s policy meeting which offered some relief to investors who were anxious to determine whether the Fed would take on a hawkish bias or not. The Fed said that while they acknowledge that the U.S. economic recovery continues to strengthen, the central bank is in no rush to raise interest rates until the latter half of next year, though they do intend to make additional curtailments of its quantitative easing plan by reducing monthly bond purchases.
Given the unexpected and relative neutrality of the Fed’s position, the Dollar was left under broad pressure with the U.S. Dollar Index down by 0.2% to trade at a 1-week trough of 79.983 .DXY. The USD/JPY traded at 101.58 Yen, down 0.1% while the EUR/USD steadied at $1.3645, holding onto much of yesterday’s 0.2% gains.
Kiwi and Aussie Dollars Take Divergent Paths
The NZD/USD continued its rally and hit a 3-year peak at $0.8839, however the Australian Dollar edged lower against its U.S. counterpart after a report showed that the Australian jobless rate rose unexpectedly in June. The Aussie Dollar had already been under pressure after the RBA governor warned investors of the possibility of a steep correction in the Aussie Dollar but had managed to recover slightly until the jobs report. The AUD/USD pair was recently trading lower at 0.9399