The release of the US Federal Open Markets Committee (FOMC) minutes of the July meeting on Wednesday seems to have acted as a catalyst for a regular surge in the EURUSD exchange rate.
In Asian trading overnight last night, the Single Currency (EURUSD) went sailing through the important resistance that was the 1.12 level (see chart) to reach its highest in about two months. Such a move would not have been normally anticipated in the quiet summer holiday period.
Global equities decline impacts the Forex market
While the release of the minutes marks the onset of the latest dollar fall (a rise in EURUSD means dollar weakness), the account of FOMC July proceedings only served to remind the markets of significant global issues, issues that will impact the decision of the FOMC to raise interest rates. These include a precipitate fall in global equity markets, with those in
to the fore; the recent devaluation of the Chinese currency; the fall in the
price of oil and other hard and soft commodities; and persistent low-to-falling
inflation in all major global economies. China
The markets seem to have now completely discounted a rise in core interest rates in the
September. That leaves only the December meeting for the FOMC to do so this year. There
is a meeting scheduled for October, but the accepted wisdom is that a rate rise
cycle initiation will only occur at a meeting that is followed by a press conference.
The October meet is not one of those. US