Without wishing to downgrade this evening’s FOMC minutes, which will no doubt result in the usual volatile market moves, stop hunting & general shenanigans, the main FED event takes places on Friday at 6.00 pm London time. This is when Janet Yellen is due to give an important speech about the US economic outlook, and so one to watch.
Meantime USD strength has continued overnight across the majors and into this morning, with German PPI helping to give the eurodollar a shove lower. Other items of note this morning include the MPC (Monetary Policy Committee) of the BOE playing their standard formation (football parlance) of 0-0-9. In other words 9 defenders, no midfield & no strikers.
For FED watchers FOMC Member Evans has been speaking in Munich and has been simply repeating his call for a delay in raising interest rates. No moves expected as he is re-iterating his well known stance as a dove. This is why we need to know where the various members of the FOMC stand on the hawk/dove scale & also whether they have any voting rights. Markets would only move if someone like Evans suddenly changed tone.
Finally to the left of the chart, the 4 hour currency strength indicator is now signalling that the US dollar is moving deeper into overbought territory in this timeframe, so we can expect to see a reversal soon – perhaps on the FED minutes this evening! The daily charsts for the currency futures are alongside with the 6A, 6B, 6C and 6E and all reflecting the recent reversal for the US dollar.