EURUSD swings wildly following FOMC minutes release

Federal Reserve release minutes from the latest FOMC meeting at 7 pm GMT. Here are key takeaways from the document:

• Almost all FOMC members say rate hike warranted “fairly soon”

• FED discussed modifying language on “further gradual” hikes

• Few policymakers were concerned over timing of rate hikes

• Almost all FOMC members agreed that gradual hikes are consistent with goals

• Debated whether to switch to overnight bank funding rate targeting rather than Fed fund rate targeting

• More emphasis on data may be needed in future meetings and statements

The overall message from the minutes can be named as mixed. At one hand we got assurance that policymakers are keen with gradual rate hike approach and timing. Moreover, the line saying that rate hike is warranted “fairly soon” is clearly hawkish but it is likely that it relates to the December meeting and in that case it is not a surprise. On the other hand, discussion over modifying language can be seen as an attempt to soften rhetoric. Additionally, putting more emphasis on data may also be viewed as somewhat dovish as the last data stream from the US economy cannot be named better than mixed. The EURUSD moved higher in the knee-jerk moved touching 1.1391 handle. However, the pair was quick to reverse gains and favour USD for a moment. All in all, within the first quarter following the release the pair is trading at levels seen prior to publication.

Source: xStation5