Dol­lar weak­ened by “Dovish” Fed min­utes

Financial Mirror (Cyprus) - - FRONT PAGE -

The Dol­lar has soft­ened against most of its ma­jor part­ners de­spite the min­utes from May’s Fed­eral Re­serve mone­tary pol­icy meet­ing re­in­forc­ing ex­pec­ta­tions of a rate hike in June.

Most pol­icy mak­ers were op­ti­mistic over the eco­nomic out­look, and felt it would “soon be ap­pro­pri­ate” to raise in­ter­est rates if the US out­look re­mains in­tact. How­ever, the lack of clar­ity of­fered on rate hike tim­ings be­yond June sim­ply left most in­vestors empty-handed. Al­though in­fla­tion hit the Fed’s 2% tar­get in March, of­fi­cials re­mained skep­ti­cal and some­what cau­tious on whether con­sumer prices could re­main at such lev­els. With the cen­tral bank ex­press­ing tol­er­ance over in­fla­tion pos­si­bly over­shoot­ing its tar­get, ex­pec­ta­tions could ease over the Fed adopt­ing a more ag­gres­sive ap­proach to­wards mone­tary pol­icy nor­mal­i­sa­tion. In­vestors seem to have scaled back on bets of four rate hikes this year to an up­per limit of three and this can be re­flected in the Dol­lar’s price ac­tion.

Tak­ing a look at the tech­ni­cal pic­ture, the Dol­lar Index has re­treated from 2018 highs but still re­mains firmly bullish on the daily charts. There have been con­sis­tently higher highs and higher lows while the MACD has crossed to the up­side. A de­ci­sive break­out above 94.00 could en­cour­age an incline higher to­wards 94.20 and 94.50, re­spec­tively. Korea. This good­will ges­ture could ease geopo­lit­i­cal ten­sions on the Korean Peninsula. around $1300 could trans­form into a dy­namic re­sis­tance that en­cour­ages a de­cline to­wards $1280.

Mar­kets Re­port b

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