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19 Feb 2014
Flash: All eyes on the FOMC today - BTMU
FXStreet (Barcelona) - Lee Hardman, FX Analyst at the Bank of Tokyo Mitsubishi UFJ, observes that the FOMC minutes to be released this evening in Europe will be the main event.
Key Quotes
"The US dollar has continued to weaken modestly in the near-term reflecting building investor concerns over the US economic slowdown in early 2014. The dollar index has trended lower so far during February declining by 1.7% back towards the 80.0-level, which is still just above its average level over the last three years."
"US dollar weakness extended yesterday following the release of both the weaker than expected Empire manufacturing and NAHB housing market surveys for February. The NAHB housing market index declined sharply by 10 points to 46 in February recording its largest monthly decline on record."
"The NAHB acknowledged in their release statement that the unusually harsh winter weather conditions led to a decline in buyer traffic, although builders were also concerned about meeting ongoing and future demand due to a shortage of lots and labour. Still we remain confident that the recent economic slowdown in the US and related US dollar weakness will likely prove only temporary."
"Fed Chair Yellen acknowledged the recent weakness in the US economy in her testimonies to Congress last week but signalled that the Fed still plans to continue gradually tapering QE. Evidence of a more protracted US economic slowdown and/or downside inflation surprises which is already low would likely be required for the Fed to pause QE tapering ahead. The release of the latest FOMC minutes tonight should reinforce that message, while any concerns expressed over recent developments in emerging markets upon the US economy will likely be viewed as only modest."
Key Quotes
"The US dollar has continued to weaken modestly in the near-term reflecting building investor concerns over the US economic slowdown in early 2014. The dollar index has trended lower so far during February declining by 1.7% back towards the 80.0-level, which is still just above its average level over the last three years."
"US dollar weakness extended yesterday following the release of both the weaker than expected Empire manufacturing and NAHB housing market surveys for February. The NAHB housing market index declined sharply by 10 points to 46 in February recording its largest monthly decline on record."
"The NAHB acknowledged in their release statement that the unusually harsh winter weather conditions led to a decline in buyer traffic, although builders were also concerned about meeting ongoing and future demand due to a shortage of lots and labour. Still we remain confident that the recent economic slowdown in the US and related US dollar weakness will likely prove only temporary."
"Fed Chair Yellen acknowledged the recent weakness in the US economy in her testimonies to Congress last week but signalled that the Fed still plans to continue gradually tapering QE. Evidence of a more protracted US economic slowdown and/or downside inflation surprises which is already low would likely be required for the Fed to pause QE tapering ahead. The release of the latest FOMC minutes tonight should reinforce that message, while any concerns expressed over recent developments in emerging markets upon the US economy will likely be viewed as only modest."