Forex Today – Asian Session: Fed cools tightening, dollar remains strong

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What to watch for on Thursday, August 18:

The US dollar finished higher against most major rivals on Wednesday, despite suffering a short-term pullback following the release of the FOMC meeting minutes.

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The greenback suffered a short-lived setback following the release of the Federal Reserve document, which showed US policymakers unanimously agreed to hike rates by 75 basis points, seeing a slower pace of hikes at some point. It was also read that many Fed officials saw a risk that the Fed could tighten more than necessary. In addition, some participants said the policy rate would have to reach a “constraining enough” level to control inflation and stay there “for some time.”

The EUR/USD pair managed to post modest intraday gains and traded around 1.0180, although local GDP was revised down. The GBP/USD pair, meanwhile, remained under pressure and ended the day around 1.2050.

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Commodity-linked currencies were among the weakest, with AUD/USD trading around 0.9630 and USD/CAD just above 1.2900. NZD/USD dipped to 0.6270 as the New Zealand dollar remained strong despite RBNZ Governor Orr saying he did not consider a 75 basis point rate hike and raised the main rate by 50 points .

The greenback made modest gains against haven currencies, with USD/CHF trading around 0.9510 and USD/JPY at 135.00.

Gold is trading at $1,765 a troy ounce, extending its weekly decline, while crude oil prices spent the day consolidating losses. WTI changes hands at $87.60 a barrel.

Below is the employment data for Australia.

Source: Fx Street

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