Join +750K new investors every month who copy stock picks from billionaire's portfoliosSign Up Free

Dollar gains from FOMC minutes may be short-lived

Published 23/05/2024, 05:56 pm
© Reuters
- -- On Wednesday, the release of the Federal Open Market Committee (FOMC) minutes from the 1 May meeting indicated a more hawkish stance than anticipated, providing a temporary boost to the US dollar. The minutes revealed that while the policy was deemed "well positioned," there was an openness among many members to implement additional rate hikes if necessary. Furthermore, there was a debate among "many" participants on whether the current policy was restrictive enough to address economic concerns.

The hawkish tone of the minutes comes in the context of high inflation rates and a strong job market reported in March. Despite more positive data in April, some FOMC members, including Neel Kashkari and Chris Waller, have expressed ongoing worries regarding inflation. However, the overall sentiment of the FOMC may have shifted to be less hawkish since the May meeting.

Today, the strength of the dollar is under scrutiny as new economic data, including Purchasing Managers' Indexes (PMIs) from both the US and the eurozone, are set to be released. The eurozone's PMI figures are expected to potentially offer a more positive outlook compared to those of the US. Additionally, Nvidia (NASDAQ:NVDA)'s robust earnings report, released after the close of yesterday's market, could contribute to an improved risk sentiment.

The US economic calendar for today also includes new home sales, the Kansas City Fed Manufacturing Activity survey, and jobless claims data. The Dollar Index (DXY) faces challenges in maintaining its position above the 105.0 mark, though a gradual appreciation of the dollar leading up to the 31 May US Personal Consumption Expenditures (PCE) release has not been ruled out.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.