Dollar weakened by “Dovish” Fed minutes
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.