The release of the FOMC meeting minutes yesterday revealed that the Federal Reserve is very close to implementing strategies to stimulate the world’s largest economy via the use of monetary easing tools.
The greenback was down against most major currencies as it became apparent that if the US economy does not gather momentum in its recovery, the Fed Reserve will intervene. It was said “Many members judged that additional monetary accommodation would likely be warranted fairly soon unless incoming information pointed to a substantial and sustainable strengthening in the pace of the economic recovery,” The release of the minutes, with such comments sparked a selling of the dollar and more stock purchases. The USD was down 0.15% against the Euro, also down 0.15% against the Swiss Franc, down 0.07% against the Yen, down 0.27% against the Canadian Dollar, down 0.13% against the GBP and down 0.17% against the Aussie. The US Dollar index which measures the greenback against a basket of 6 weighted currencies was down 0.20%, valued at 81.41.
Earlier yesterday, before the FOMC minute’s release, existing home sales in the US came in weaker than expected with sales of previously owned homes rising 2.3% in July to 4.47 million units, lower than the expected 4.52 million units.
The heavily weakened USD meant a sharp rise in the fortunes in the commodities markets with Gold rising 1.58% to trade at 1665.05, whilst Silver rose by 2.16%, to trade at 30.193. Crude Oil enjoyed gains too, with the weekly report yesterday showing that U.S. crude oil inventories dropped by 5.4 million barrels in the week ending Aug. 17, compared to expectations for a fall of just 413,000 barrels. At time of writing, the price of Crude Oil was up 0.88%, trading at 98.11 a barrel.
Today is expected to be a very high volume day of trading with important news and data released throughout the day. Starting with German GDP and then European PMI, the attention switches over to the US with initial jobless claims figures and New Home Sales data being released making this a busy day for traders.