US DOLLAR OUTLOOK: DXY INDEX, FED MEETING MINUTES, TAPERING
- US Dollar[1] peels back from session highs despite relatively hawkish FOMC[2] minutes
- DXY Index erases intraday gains to trade little changed with Fed hawks uninspired
- Upcoming jobless claims and CPI data due for release could guide USD[3] price action
- Check out our Real Time News[4] page for timely market news and analysis
US Dollar price action is coming under a bit of pressure during Wednesday afternoon trade. The broader DXY Index is now flat on the session after being up as much as 0.3% intraday. Downward pressure on the USD seems to coincide with the release of June 15-16 Fed meeting minutes just crossing market wires. It appears that the FOMC minutes, which arguably are backward looking and stale, have failed to fuel an extension of the US Dollar rally ignited by the risk of a hawkish shift[5] in Fed policy three weeks ago.
The latest round of FOMC minutes noted how Fed officials “agreed to continue assessing the economy’s progress toward the Committee’s goals and to begin to discuss their plans for adjusting the path and composition of asset purchases.” Furthermore, the FOMC minutes indicated that “participants generally judged that, as a matter of prudent planning, it was important to be well positioned to reduce the pace of asset purchases, if appropriate, in response to unexpected economic developments, including faster-than-anticipated progress toward the Committee’s goals.”
DXY INDEX – US DOLLAR PRICE CHART: 4-HOUR TIME FRAME (15 JUNE TO 07 JULY 2021)
Chart by @RichDvorakFX[6] created using TradingView[7]
Not to mention, a “substantial majority of participants” stated how the risk to inflation outlook is tilted to the upside. This compares
