The U.S. dollar was under pressure against major currencies after the Federal Reserve released the minutes from the Federal Open Market Committee (FOMC) meeting on June 17. The minutes showed the central bank members are unsure of the sustainability of the U.S. economic recovery and the effect raising rates sooner rather than later could have.
There were also questions about how the Eurozone would react to the situation in Greece. It is worth noting that the FOMC happened three weeks ago so that policymakers didn’t know what its common knowledge today as Greece is on the brink of leaving the Eurozone if it cannot reach a deal this week.
The EUR/USD has gained almost 1 percent after the release of the FOMC minutes as the timing of the Fed’s first rate hike keeps getting pushed back by the markets. September is going the way of the June meeting as first the U.S. economy does not seem cope with a strong USD and lukewarm domestic demand and second the economic shocks from China and Europe have yet to record their full impact. U.S. Employment and optimistic forecasts were driving the USD higher versus the EUR as Europe was dealing with weekend after weekend of disappointing deal deadlines.
The Fed is facing a change in multiple variables on the macro front, and not a confirmed lift off in the U.S. economy which could end up not only pushing back the much-awaited rate hike from September all the way to next year if conditions don’t improve.
Federal Reserve Chair Janet Yellen will get a change to chime in on the state of the economy on Friday, July 10 in Cleveland.