Markets pricing US interest rate hike by 40% following Fed meeting minutes

17 Aug 2017 10:36 AM

The US dollar fell in yesterday's trading following the release of the minutes of the FOMC meeting in July, which showed the fear of policymakers of the recent weakness of inflation, and some asked to ease the process of raising interest rates until the picture is quite clear, so the dollar index hit its lowest level since the beginning of the week at 93.19 This morning, also the US dollar gave up most of its gains against the Japanese yen, dropping from its highest level since the beginning of this month to 109.65 levels before recovering slightly with morning trading.

The minutes of the meeting showed the divergence of members and the absence of a specific date for the Fed's budget reduction process, but they stressed that many sectors of the economy would continue to improve and that growth would gain further momentum as economic data continued to improve.

The Australian dollar rose strongly to reach its highest level since August 4 at 0.7962 against the US dollar after the economy added 27.9 K jobs in July, surpassing market expectations, in addition last month upward revision to 20,000 jobs from 14 K. Unemployment fell to 5.6% as expected.

The pound gained strong support after wage growth rose better than expected and unemployment fell to 4.4%, its lowest level since 1975, as GBPUSD rose to a two-day high of 1.2908, and it is expected to make further rise after rebounding from a strong support area represented in the bottom line of the ascending wedge pattern on the daily chart and the 100-day moving average, as well as 61.8% Fibonacci correction for the recent bullish movement within the wedge.

The euro also rose against the US dollar from the 1.1690 support level to its highest level over the previous two days at 1.1789, supported by the growth of the euro area economy in the second quarter of 2017 by 2.2%.

Oil fell rapidly in yesterday's trading to its lowest level since July 25 at 46.63 $ after US oil inventories continued to fall for the seventh straight week by 8.9 million barrels. For the gold, the Fed's fears pushed prices to reach its highest level since August 11 at 1290$ per ounce.

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