US Dollar Strengthens After Fed Releases Minutes of Last Meeting
Arslan Butt • 1 min read
On Thursday, the US dollar appears to be on the rebound, holding steady after strengthening during the previous session after minutes from the Fed’s latest meeting highlighted concerns about economic recovery in the US. At the time of writing, the US dollar index DXY is trading around 9
The dollar turned bullish, posting the largest gain in a day since March after policymakers raised concerns about whether the central bank had room to turn more dovish in the wake of the coronavirus crisis. The minutes also indicated that the US economy was unlikely to rebound until the pandemic was brought under control.
The minutes failed to offer clarity on the Fed’s approach towards inflation, after markets expected the central bank to adopt an average inflation target. Traders expected the Fed to announce that it would want inflation above 2% to compensate for the period when it remained weaker.
Despite the slight bullishness, traders expect the US dollar to weaken against its major peers in the near future as other economies are working towards recovery at a faster pace than the US. Later today, the dollar could see some movement following the release of the weekly jobless claims data, which could offer more insight into the state of the US economy.