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FOMC minutes in focus – BTMU

FXStreet (Barcelona) - Lee Hardman, Currency Analyst at Bank of Tokyo-Mitsubishi UFJ notes markets focus revolving around the FOMC minutes to be released later in the day and sees the overall tone to as supporting the tighter monetary policy next year.

Key Quotes

“The release of the latest FOMC minutes from their 29th October meeting will be in focus today. The accompanying policy statement from that meeting was viewed as less dovish than expected as the Fed dropped their description that there remains significant underutilisation of labour resources.“

“The Fed also made their low rates commitment more data dependent and remained confident that downside risks to inflation in the medium-term had diminished despite lower energy prices and other factors in the near-term.”

“The minutes may include more discussion regarding the impact of weaker global growth, a stronger US dollar, and lower commodity prices, which when compared to the statement could at least initially be viewed as more dovish weighing on the US dollar.”

“However, the overall tone of the minutes should be broadly consistent with the Fed gradually shifting towards tightening monetary policy next year which will support a stronger US dollar.”

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