Market steadies, awaiting more Central Bank cues

Yesterday, the Dollar stabilized against its major peers early after the Federal Reserve’s policy meeting minutes on June 13-14 showed a rift among policymakers over the pace of future US rate increases with signs of inflation fading.

Several officials wanted to announce a start to the process of reducing the Fed’s large portfolio of Treasury Bonds and mortgage-backed securities by the end of August but others wanted to wait until later in the year.

Markets were also waiting for comments from San Francisco Fed President John Williams and Fed Board Governor Jerome Powell for their potential impact on US Yields. ADP employment report, ISM non-manufacturing PMI and initial jobless claims were also closely monitored during afternoon.

On Thursday as well, Oil rebounded from the biggest daily loss in four weeks as industry data showed US Crude and Gasoline stockpiles declined. The gains reflected firm fuel demand in the United States, where data from the API on Wednesday showed that US Crude inventories fell by 5.8 million barrels in the week to June 30. However, Oil remains in a bear market amid concerns that rising supply from Libya to the US will counter production cuts from the OPEC and its partners including Russia.

Meanwhile, the Australian Dollar slipped against its peers, getting only fleeting support from a higher-than-expected trade surplus. The currency is likely to have its worst weekly performance since early April. The drag came largely yesterday with bulls holding a grudge against the Reserve Bank of Australia for sticking to its neutral bias on interest rates. That overshadowed official data showing Australia’s trade surplus rebounded sharply in May, putting exports back on track to add to economic growth.