FOMC minutes reaffirm patient stance

The dollar traded lethargically in Asia following the Fed inspired sell-off, as the FOMC minutes lent towards a dovish tone. The committee revealed that dropping ‘patient’ from the statement may lead to an undue focus on a narrow range of dates as staff noted, like all central banks, that the downside risk to inflation has increased. They also added that this wasn’t just due to the demise of the oil price, emphasising ‘recent soft monthly readings on core inflation’. The probability of Fed hike in June has now dropped to 35%.

The Nikkei reached a fresh 15-year high which would normally correlate with a higher USD/JPY, but countering the stronger Nikkei was media suggestions that the BoJ is considering delaying the timing of the 2% CPI target. An article in the WSJ caused the AUD to fall back below 0.78 as it highlighted that ratings agency Standard & Poor would review Australia’s AAA credit rating if the government’s budget continues to show signs of vulnerability as commodities prices continue to decline.

The ECB will release the minutes of their last meeting at 12.30 today as the US session will bring us the Eurozone consumer confidence data along with the Philadelphia Fed business outlook. The Greek saga is likely to dominate the proceedings in the single currency again, as time is running out for the Greek administration to ask for an extension on the so-called ‘loan agreement’.

EUR/USD
Supports 1.1390-1.1320-1.1260 | Resistance 1.1450-1.1530-1.1680

USD/JPY
Supports  118.10-117.25-116.80 | Resistance 119.30-120.50-122.00

GBP/USD
Supports 1.5410-1.5385-1.5320 | Resistance 1.5490-1.5530-1.5620