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Markets Adjusting Ahead of the FED Meeting Minutes

Trading activity remained subdued as market participants awaited the release of the Federal Reserve’s meeting minutes scheduled for release later today. The absence of significant economic data releases this week has contributed to relatively quiet trading sessions, especially for major currency pairs. The US dollar has exhibited stability against most major currencies, with minimal movement observed across the board. However, we saw a dip in Gold, so we decided to buy XAU since we don’t expect much more downside action, with the FOMC minutes approaching.

Will the FOMC minutes point to a June rate cut?

Notably, the USD/JPY pair has hovered near the 150.00 level, while GBP is hoovering above 1.26. EUR/USD has shown little change too, sticking around the 1.0800 mark, with not much on the European economic calendar. In contrast, the New Zealand dollar has experienced a modest uptick, with the NZD/USD pair up by 0.3% to 0.6180, extending gains from the previous session.

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Will FED Meeting Minutes Send the USD Higher

Overall, risk sentiment in the foreign exchange market is mixed and volatility remains subdued, reflecting the lack of significant catalysts and relatively lower daily bond yields. Market participants are awaiting insights from the Fed minutes for potential direction in currency trading.

The Federal Reserve’s decision-making process regarding rate cuts has become more difficult now due to higher-than-expected inflation rates and a noticeable decline in retail sales in January. Balancing the need to address inflationary pressures without prematurely loosening monetary policy poses a significant challenge for the FED.

As a result of these complexities, the anticipated timing of the first rate cut by the Fed has been pushed back to June. This delay underscores the intricacies of the current economic situation and highlights the intense scrutiny the Fed faces from the market as it navigates these challenges.

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Skerdian Meta
Lead Analyst
Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.
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