The U.S. dollar was near flat on Wednesday, while the Euro was also largely unchanged as Italy’s Prime Minister quit. Uncertainties surrounding the U.S.-China relations also affected market sentiment, as U.S. President Donald Trump said he had to “take China on” even if it would cause short-term impact on U.S. economy.
EUR/USD under pressure near 1.1100 with FOMC Minutes on sight, despite having interrupted a five-day negative streak on Tuesday, as renewed jitters on the US-China trade front plus falling US yields weighed on the buck.
The safe-haven Japanese yen fell against the U.S. dollar even as stock markets traded lower amid concerns on a slowing global economy.
GBP/USD fails to carry the previous pullback as traders remain side-lined ahead of key events. Headlines from Germany helped trigger the earlier rise. All eyes on UK PM Johnson’s EU visit and FOMC minutes.
The political risks around Italian coalition breakdown and Brexit will offer fresh incentives to the EUR, GBP traders, as a data empty European session lies ahead. Also, the focus will remain on the UK PM Johnson’s meeting with the German Chancellor Merkel later today for some clarity on the Brexit issue.
The main event risk for the NA session is the Federal Open Market Committee’s July meeting’s minutes. The minutes could offer fresh hints on the Fed’s rate cut expectations, in the face of growing US recession fears. The US Existing Home Sales data and the Energy Information Administration (EIA) Crude Stock data, due at 14:00 GMT and 14:30 GMT respectively, will be in focus also.
Gold prices slipped on Wednesday ahead of the highly anticipated Jackson Hole symposium and Fed’s meeting minutes, while Oil prices gained after the American Petroleum Institute (API) reported that U.S. crude inventories fell for the first time in three weeks.