What you need to know on Thursday, January 6:
The dollar was down for most of Wednesday, but received an unexpected boost from the minutes of the US Federal Reserve meeting. US policymakers noted that “in light of elevated inflationary pressures and the strengthening of the labor market, participants felt that the increase in policy accommodation provided by the current pace of net asset purchases was no longer necessary. “
Furthermore, the document showed that the majority of participants judged that the conditions for a rate hike could be met relatively soon if the recent pace of improvement in the labor market continues. Hours earlier, the US released the ADP survey on private job creation, with a much better 807,000 than expected. Finally, the legislators began to discuss the reduction of the balance.
Wall Street traded mixed, with the Nasdaq Composite lower, but the DJIA rose to record highs. The sell off of technologies could be attributed to some risk aversion, as investors are abandoning high-growth stocks for more valuable cyclical stocks. However, the Fed’s announcement sent all major indices bearish as yields on US government bonds rose.The yield on the 10-year Treasury note reached the 1.70% level.
The EUR / USD peaked at 1.1346, losing ground and is now hovering around 1.1310. GBP / USD flirted with 1.3600, also falling back but retaining most of its intraday gains. Commodity currencies trimmed post-Fed intraday gains, ending the day with modest losses. Safe-haven currencies were up, with USD / JPY holding above 116.00.
Gold peaked at $ 1,829.59, from where it began to retreat before the Fed. It is currently trading around $ 1,814 a troy ounce. Crude oil prices maintain modest gains, with WTI trading around $ 77.60 a barrel.
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