November has been a depressing month for the USD Index. Values have fallen from above 94.000 to beneath 92.000 amid the zero rate of interest atmo
November has been a depressing month for the USD Index. Values have fallen from above 94.000 to beneath 92.000 amid the zero rate of interest atmosphere and persistence of the Fed’s limitless QE. Sadly, right this moment’s FOMC Minutes didn’t give foreign money merchants many specifics.
The chart beneath is a take a look at December USD Index futures. Charges are grinding south towards September’s low.
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Following the three November U.S. presidential election, the Chinese language yuan (CNY) placed on an enormous rally vs the USD. The USD/CNY is off 1.75% for November, a premier sign that China has taken the financial lead amid the COVID-19 financial meltdown. Actually, since June, the USD/CNY has plunged 7.8%.
Within the mixture, the USD Index has fared significantly better than the USD/CNY. Nevertheless, charges are nonetheless down huge over the previous 6 months and in bearish territory. And, in keeping with right this moment’s FOMC Minutes, there isn’t a lot assistance on the horizon.
FOMC Minutes: Recap
Under are just a few of the important thing statements from the FOMC Minutes taken on the 5 November assembly:
- “The Federal Reserve’s stability sheet elevated modestly over the intermeeting interval to $7.2 trillion. Progress in safety holdings was partially offset by a decline in U.S. greenback liquidity swaps.”
- “Contributors mentioned the FOMC’s ongoing asset purchases, together with the position they’re taking part in in supporting the Committee’s maximum-employment and price-stability objectives.”
- “Monetary market sentiment was little modified over the intermeeting interval.”
- “Within the absence of clear progress towards additional fiscal stimulus, the workers eliminated the belief that a further tranche of fiscal assist could be enacted.”
Overview: In the present day’s FOMC Minutes didn’t inform us a lot about the way forward for FED coverage. It seems to be like a dialogue has begun on when to switch open market operations with respect to QE limitless. Nevertheless, the shortage of extra COVID-19 stimulus is a sticking level. So, the opinion of the FOMC is little modified from September ― a COVID-19 restoration is underway, fragile, and in want of extra accommodative coverage.