The EURUSD currency pair was trading down 18 pips at writing as the US dollar edged higher against the single currency following the release of the FOMC minutes. The minutes indicated that the Federal Reserve has no immediate plans to reduce interest rates and might even consider raising them if inflation remains uncomfortably high.
EURUSD Falls on Upbeat US Jobless Claims Data, FOMC Minutes
According to the minutes, the central bank intends to maintain a restrictive monetary policy until inflation approaches its target of 2%. However, Federal Open Market Committee (FOMC) members believe any decisions should be cautiously approached.
In summary, the minutes from the meeting provided a relatively balanced perspective, leaving little clear direction for the US dollar. The latest probabilities from the CME FedFund suggest that the first 25 basis point cut in US interest rates may occur in May next year.
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The currency pair was edging higher following the release of the US weekly initial jobless claims data, which fell by 24,000 to 209,000 compared to the expected 225,000 new claims. The continuing claims also fell to 1.84 million in the week ending November 11.
The US Dollar Index tracks the dollar’s performance against a basket of its peers and also edged higher on the upbeat initial jobless claims data. However, the US durable goods orders contracted faster than in October, limiting the DXY’s gains.
The US durable goods orders declined by 5.4% or $16 billion to come in at $279.4 billion in October, according to the data released by the US Census Bureau. The durable goods orders had increased by 4.6% in September. The 5.4% decline was much worse than analysis estimates of a 3.1% decline.
Overall, the US dollar remains directionless, and we could easily see the euro rally higher against it, leading to more gains for the EURUSD currency pair.
