After making modest gains over the past two days, the U.S. dollar is a touch weaker this morning.
Overview
Some had thought that Federal Reserve Chairman Jerome Powell would drop clues as to the central bank’s thinking on reeling in its monetary stimulus. Instead, Powell refrained from speaking at monetary policy altogether while addressing educators at a town hall. We will get another chance today as the FOMC will release the minutes of their latest meeting at 2 p.m.
Still, it is most likely we will get our most definitive messaging from the Federal Reserve at next week’s Jackson Hole Symposium.
Data this morning has had a muted effect on the dollar as July housing starts disappointed by falling 7.0%. In addition to the Fed minutes, Federal Reserve Bank of St. Louis President James Bullard will be speaking on the economic outlook and near-certain to hear his thoughts on the recent surge of coronavirus cases.
What to Watch Today…
- FOMC meeting minutes at 2 p.m.
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EUR ⇑
The Euro is a touch stronger to start the day, but not before reaching year-to-date lows overnight. The common currency is now within a few tenths of a percent from its lowest level since November of last year. The recent move is likely to be more about dollar strength in the face of increased Delta fears, than Euro weakness. There is no major economic data set for release in the Eurozone today so the pair may hold a tight range until this afternoon’s Fed release. EUR/USD is near a major technical and psychological barrier so if the Fed is not as hawkish as some expect, the common currency could find relief and pop higher.
NZD ⇓
The New Zealand dollar extended yesterday’s losses overnight after the Reserve Bank of New Zealand surprised many and refrained from raising interest rates. Odds the RBNZ would raise rates were over 80% as recently as early Monday, but the central bank pointed to the recent lockdown as the reason for their caution. NZD/USD is down over 1.5% this week and will remain vulnerable if the lockdowns are extended.
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