- EUR/USD trades around 1.1935 before the London open.
- The Dollar sell-off pauses despite the equity rally in Asia.
- Yield curve control indications in the Fed minutes can increase selling momentum.
EUR/USD couldn’t sustain the early gains to 1.1950 on Tuesday Asian session and was trading near 1.1935, mostly unchanged from the previous close.
Can The US Dollar Stage A Come Back?
The dollar index, DXY, indicates the dollar value against a basket of competing currencies. It has recovered a bit from the recent 28-month low of 92.13.
The bullish mood in Asian stocks didn’t trigger further selling in the dollar today. The major indices touched a seven-month high on Wednesday, in Asia, taking a cue from the S&P 500 record close on Tuesday.
The dollar relief uptick was also not from any show of strength in the US yields – which remained under pressure. Hence it is safe to conclude that the dollar bears have paused their selling ahead of the Fed minutes, due today, of the June 28-29 Federal Reserve meeting.
The market will, later today, focus on the US policymakers’ prognosis on employment, growth, and inflation. The dollar will weaken further if there is mention of yield-curve control. Speculations have been rife that the FED will follow RBA-style yield curve control.
EUR/USD during the European session is likely to take into account the developments in Eurozone EcoFin meeting, Eurozone’s Current Account data, and Consumer Price Index.