- Euro retreats on Wednesday versus US dollar, erasing some of Tuesday’s gains.
- FOMC minutes ignored by markets, Fed to keep rates at zero until economy weathered recent events.
The EUR/USD pair remained near 1.0870 after the release of the FOMC minutes from the latest emergency FOMC meeting. Market participants ignored the minutes.
Currency pairs and Wall Street were unaffected by the minutes. According to the document, all participants saw the near-term economic outlook of the US as having deteriorated sharply in recent week, becoming profoundly uncertain. Participants “judged that it would be appropriate to maintain the target range for the federal funds rate at 0 to 1/4 percent until policymakers were confident that the economy had weathered recent events and was on track to achieve the Committee’s maximum employment and price stability goals.”
The US dollar held on to session losses after the minutes. The DXY was up just 0.20%, far from the top. The decline in EUR/USD and the modest gains seen in USD/CHF were the key factors explaining why DXY was still gaining on Wednesday. The greenback was falling significantly versus AUD, NZD, GBP and marginally against JPY. Those results remained intact after the minutes. The weakness in the euro was associated with the lack of agreement on the Eurogroup regarding an stimulus package.
The EUR/USD was consolidating a modest retreat, trimming some weekly gains. On Tuesday it jumped more than a hundred pips to 1.0927 and today pulled back, finding support at 1.083.