Ahead of the FOMC Minutes

Asian stock markets have rebounded after Wall Street fell on weak retail sales as investors awaited an update from the Federal Reserve on possible plans to reduce U.S. stimulus. Shanghai, Tokyo, Hong Kong, and Sydney advanced.  

Investors watch for the Fed’s release of minutes from its July policy meeting for an update on when the central bank might start reducing bond purchases that pump money into the financial system and look at raising interest rates. 

Some Fed officials, citing strong hiring growth and rising inflation say policy normalisation should start soon. Others argue the Fed needs to see stronger economic data to be sure recovery is established. 

The Dollar hit a nine-month high against the euro and held broad gains elsewhere on Wednesday as investors have cut exposure to riskier currencies, mostly on virus concerns, while the kiwi was sent on a loop when the central bank held fire on rate hikes. 

The Kiwi, heavily sold on Tuesday, fell further to also make a nine-month trough at $0.6868 after the Reserve Bank of New Zealand held off on raising rates amid a snap lockdown in the country over seven Covid-19 cases. However, it soon recovered, climbing to $0.6919 at 09.00 at GMT+3. 

The highly contagious delta variant has found a foothold in formerly Covid-free New Zealand. New Zealand’s central bank left interest rates unchanged at a record low of 0.25% owing to uncertainty around the outbreak, which the health chief thinks could run to 50 or 100 cases. 

Later on Wednesday traders are looking to minutes from the Federal Reserve’s July meeting for clues around the timing or speed of plans to taper asset purchases. They are due at 21.00 GMT+3. 

If you have any questions, please email our Education Centre.

If you have any questions or require any assistance, please contact one of our support team members via our Live Chat or email [email protected].

We are Errante. Trading made personal.

Errante is the trading name used by Notely Trading Ltd, an Investment Firm authorized and regulated by the Cyprus Securities and Exchange Commission (CySec) under license number [383/20]. Errante is governed by the Markets of Financial Instruments Directive (MiFID II) of the European Union.

To find out more about Errante, visit https://errante.eu.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72.50% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Read our Risk Disclosure.

Get started for free

Create Account
×

Search