US Dollar Tumbled ahead Fed’s July Meeting Minutes Release

US Dollar Tumbled ahead Fed’s July Meeting Minutes Release

On Wednesday, August 18, the US Dollar tumbled as investors eye for the release of the Federal Reserve’s July meeting minutes later in the day.

The US Dollar Index, which trails the greenback in opposition to its six other rival currencies, plummeted 0.03% to 93.120. This is just below its one-week high on Tuesday.

Meanwhile, several investors are eyeing the release of the minutes from the Federal Reserve’s latest July meeting later this day.

The wait is to figure out some hints to the central bank’s interest rate hike and asset tapering timetable.

After this, investors also await the Fed’s conference of the central bankers’ conference at Jackson Hole, which could give more possible hints.

On another note, the Reserve Bank of New Zealand handed down its latest policy decision later in the day.

The Kiwi’s central bank kept its interest rate at 0.25%, which is far from analysts’ forecast of 0.50%.

This is due to New Zealand Prime Minister Jacinda Arden’s sudden announcement of lockdown following the country’s first coronavirus positive case in six months.

Therefore, the Reserve Bank of New Zealand postponed its interest rate hike plan.

An economist stated that the central bank is already set to pull its trigger, however, the COVID-19 positive case suddenly arrived 24 hours earlier.

Now, investors and analysts are expecting a 60% probability of an interest rate hike in October.

Another economist said that the movement of the economy depends on the longevity of the imposed pandemic curbs.

Nonetheless, there will always be a 50% chance that it will be prolonged. If so, the market does not agree to have a hike.

An analyst said that this nervous risk environment supported the safe-haven US dollar as the market pays attention to the COVID-19 case surge.

Exchange Rates over US Dollar

In addition, the USD/JPY was flat at 109.58 while the EUR/USD climbed 0.11% to 1.1722. The same with the GBP/USD 0.06% to 1.3748.

The risk-sensitive NZD/USD and AUD/USD both smashed 0.12% to 0.0008 and 0.23% to 0.0017, respectively.

On the other hand, USD/CAD and USD/CHF both plummeted 0.17% to 0.0022 and 0.07% to 0.0006, respectively. Then, SEK/USD crashed 0.66% to 0.0008.

Consequently, the USD/CNY dropped 0.06% to 0.0038 as China shook the market to an expanded reform and regulation.

The Chinese government announced that it will further tighten its supervision on the technology sector to tackle unfair competition including data security.