FOMC minutes in focus after CPI data fails to lift USD notably – MUFG

By FXStreet FXStreet (Delhi) – Derek Halpenny, European Head of GMR at MUFG, suggests that the DXY index advanced modestly yesterday but is unchanged today as the CPI data for October appeared to back up the need for action from the FOMC at the next meeting on 16th December.

Key Quotes

“The FOMC minutes this evening look set to clarify that desire with the inclusion of the explicit reference in the statement to possibly moving at the “next meeting” a likely indication that most FOMC members felt the need at that meeting to prepare the financial markets for action.”

“But it was the inflation data yesterday that certainly helped support the US dollar; although a look at the US rates market indicates that the reaction to the data was limited, hence explaining perhaps the relatively muted FX reaction. But it seems quite clear to us that the trend is now firmly upwards. The core CPI annual rate was unchanged at 1.9% and the only slight surprise came in the overall annual CPI rate, which came in at 0.2% rather than 0.1%.”

“Of course the FOMC officially target the core PCE price index and on that measure the annual rate is currently at 1.3% – some …read more

Source:: FX Street