Dollar steadies after slipping in reaction of Fed minutes

On Thursday, the Dollar recovered from overnight lows as the market digested the minutes of the Fed Reserve last policy meeting which kept the prospect of a March rate hike in play.

The Dollar initially slipped on Wednesday after the Fed’s minutes showed that “many” policymakers felt they should be ready to raise short-term interest rates again “fairly soon”, as jobs and inflation data came in line with expectations. However, there is plenty of uncertainty regarding the impact of possible tax cuts and other White House economic policies.

Meanwhile, Fed Governor Jerome Powell told reporters after a speech in New York, that “If the economy continues on this path, then his view would be that it will appropriate to gradually raise interest rates, including fairly soon”.

As for the Euro, it recovered from a six-week low against the US Dollar on Wednesday after far-right French presidential candidate Marine Le Pen’s perceived chances of winning fell, reducing concerns given the candidate’s anti-EU stance.

French centrist Francois Bayrou offered to sacrifice a separate candidacy and proposed an alliance with independent candidate Emmanuel Macron, a move that could give the former investment banker a much-needed boost to reach the runoff in May’s presidential election.

Crude Oil prices climbed approximately 1% yesterday as well, after data showed a surprise decline in US Crude Stocks as imports fell, supporting the view that a global glut is ending. The American Petroleum Institute showed that crude inventories fell by 884,000 barrels in the week to February 17 to 512.7 million, compared with expectations for a rise of 3.5 million barrels.