Forex Today: FOMC Minutes Show Tapering Debate

Adam Lemon

The FOMC meeting minutes show some members want to taper at a faster rate.

  • Yesterday’s release of the most recent FOMC meeting minutes produced no big surprises but showed that some members wish to taper at a faster rate than the agreed target of $15 billion per month. This is arguably a slightly hawkish tilt, but the release had almost no direct impact upon the US dollar, although the currency remains strong and rising.
  • US Preliminary GDP came in slightly lower than had been expected, showing an annualized GDP growth of 2.1% compared to the 2.2% which had been expected.
  • The Turkish lira stabilized yesterday, closing close to 10% lower near 12 to the USD. This suggests the strong bullish trend in this currency pair will be over, at least for a while.
  • The USD/JPY currency pair rose again yesterday to reach a new 4-year high for a third consecutive day. There is a long-term bullish trend in favor of the USD/JPY and it is likely we will see still higher prices in this currency pair over the coming days.
  • The EUR/USD continues its long-term bearish trend as it fell slightly yesterday to reach a new 1-year low price below $1.1200. Odds are in favor of lower prices here over the coming days due to the strong trend. This move is driven by enhanced euro weakness after ECB President Cristine Lagarde ruled out an ECB rate hike in 2022.

  • In the Forex market, the US Dollar Index has become established above key long-term resistance, breaking out and rising again yesterday to reach a new 16-month high in a significant technical move confirming the long-term bullish USD trend. As long as the former resistance area now continues to hold as support, the technical outlook will look bullish for the US dollar.
  • It is a public holiday in the US today (Thanksgiving).
  • Last week saw the fourth consecutive global weekly rise in new confirmed coronavirus cases after two months in which cases fell steadily.
  • It is estimated that 53.5% of the world’s population has received at least one dose of a coronavirus vaccination.
  • Total confirmed new coronavirus cases worldwide stand at over 259.7 million with an average case fatality rate of 2.00%. Cases are surging in Europe and some countries, notably Austria and the Netherlands, are implementing new lockdowns.
  • The rate of new coronavirus infections appears to now be increasing most quickly in Andorra, Austria, Belgium, Cyprus, the Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Italy, Jordan, South Korea, Laos, Liechtenstein, Luxembourg, Malta, Netherlands, New Zealand, Norway, Poland, Slovakia, Slovenia, Switzerland, Trinidad, the USA, the UK, and Vietnam.
Adam Lemon

Adam Lemon began his role at DailyForex in 2013 when he was brought in as an in-house Chief Analyst. Adam trades Forex, stocks and other instruments in his own account. Adam believes that it is very possible for retail traders/investors to secure a positive return over time provided they limit their risks, follow trends, and persevere through short-term losing streaks – provided only reputable brokerages are used. He has previously worked within financial markets over a 12-year period, including 6 years with Merrill Lynch.
Learn more from Adam in his free lessons at FX Academy

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