Forex Analysis for Thursday 6th April 2017
In the US, ADP Non-Farm beat expectations at 263K vs 184K.
The FOMC minutes showed that a change to the Fed’s reinvestment policy would likely be appropriate at the end of 2017 but that it would depend on the evolution of the economy.
On interest rates, the minutes said that officials were split on whether higher inflation warranted faster hikes now or a more gradual pace.
The minutes also showed that some saw current stock prices as “quite high”.
There was a definite return to risk-on sentiment in the earlier part of the day. However, after the Fed Minutes were released at 1900 BST, this reversed in the USD Index and global equities due to the split on outlook for rate hikes and also the stated belief that stocks are overvalued. Oil held above USD50/bbl. The JPY weakened as the rsik-on sentiment florished but turned with equities to become stronger as the market turned risk-off. CAD and AUD drop and NZD continues sideways.
Later today we have the ECB Monetary Policy Meeting Accounts.
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