FOMC Minutes Reveal an Increasingly Cautious Committee

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  • The July FOMC meeting revealed increasing concern for officials over the softness in inflation. An increasing number of Policymakers are now sceptical if low inflation is transitory. Participants indicated that risks to the inflation position could be titled to the downside.
  • The dollar declined on this news due to the Committee’s increasing anxiety around inflation and the pushed back expectations regarding the timing for the next rate increase.
  • EUR/USD did rebound ahead of the minutes and found support near the 1.1690 (S2) zone. Due to the dovish tone of the minutes, the pair was pushed higher to break above the resistance (now turned support) level of 1.1750 (S1).

Draghi is unlikely to deliver a new message next week; sources

  • Yesterday the euro tumbled as a media report familiar with ECB sources suggested Draghi will not deliver a fresh policy message when he is due to speak at the Jackson Hole economic symposium next week.
  • At the latest ECB meeting, Draghi clearly stated that a discussion on tweaks to QE would need to take place in the autumn. This could suggest we are likely to get some signals on stimulus changes in September or October.
  • EUR/GBP spiked higher once this report was released and hit the support near the 0.9080 (S1) hurdle. However the rate rebounded in the following hours and found the resistance of 0.9145(R1) level.

Today’s Highlights

  • During the European day, we get the UK retail sales for July. Expectations are for both the core and headline figures to have slowed, which may bring the GBP under renewed selling interest. In Eurozone, the ECB minutes for the July meeting will be in focus, however this release is not usually a major market mover.
  • We have two speakers on the agenda: Dallas Fed President Robert Kaplan and Minneapolis Fed president Neel Kashkari.




  • Support: 1.1750 (S1), 1.1690 (S2), 1.1620 (S3)
  • Resistance: 1.1830 (R1), 1.1900 (R2), 1.1980 (R3)




  • Support: 0.9080 (S1), 0.9050 (S2), 0.9000 (S3)
  • Resistance: 0.9145 (R1), 0.9190 (R2), 0.9240 (R3)


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