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Forex: US Dollar Looks for a Lifeline in FOMC Meeting Minutes

By , Currency Strategist
19 February 2014 07:36 GMT

Talking Points:

  • BOE Meeting Minutes, UK Jobless Claims in Focus in European Hours
  • Pound Follow-Through Likely Limited on Priced-In Policy Expectations
  • US Dollar May Rise as Fed Minutes Stress Commitment to Tapering QE

The publication of minutes from February’s Bank of England monetary policy meeting headlines the economic calendar in European hours. The document will help to further illuminate MPC officials’ discussion about the evolution of the Bank’s strategy that led to its augmented forward-guidance framework unveiled in last week’s Quarterly Inflation Report.

From a practical perspective, that document has already reveled the new strategy being adopted by Mark Carney and company, limiting the Minutes’ market-moving potential. With that in mind, follow-through on any near-term volatility borne of subtle nuances in officials’ rhetoric may prove limited. January’s UK Jobless Claims data is likewise on tap, with a 20,000 decline expected.

Looking ahead, the day’s pivotal bit of event risk comes in the form of minutes from January’s FOMC meeting. As we discussed in detail earlier in the week, the report may mark the beginning of a reversal for the US Dollar. The greenback has faced heavy selling pressure in recent weeks amid what appeared to be an unwinding of EM-driven risk aversion. The currency may find renewed vigor if a relatively hawkish tone from Fed officials reaffirms their commitment to the QE “tapering” process in spite of recently disappointing US economic news-flow.

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Asia Session

GMT

CCY

EVENT

ACT

EXP

PREV

23:00

AUD

Conference Board Leading Index (DEC)

0.8%

-

0.2%

23:30

AUD

Westpac Leading Index (MoM) (JAN)

-0.2%

-

0.1%

0:00

AUD

Skilled Vacancies (MoM) (JAN)

1.4%

-

1.7%

0:30

AUD

Wage Cost Index (QoQ) (4Q)

0.7%

0.6%

0.5%

0:30

AUD

Wage Cost Index (YoY) (4Q)

2.6%

2.5%

2.7%

1:45

CNY

MNI Business Indicator (FEB)

50.2

-

52.2

4:30

JPY

All Industry Activity Index (MoM) (DEC)

-0.1%

0.1%

0.4%

5:00

JPY

Leading Index (DEC F)

111.7

-

112.1

5:00

JPY

Coincident Index (DEC F)

111.7

-

111.7

5:00

JPY

Bank of Japan Monthly Report (FEB)

-

-

-

5:30

JPY

Nationwide Dept Store Sales (YoY) (JAN)

2.9%

-

1.7%

5:30

JPY

Tokyo Dept Store Sales (YoY) (JAN)

5.4%

-

3.6%

European Session

GMT

CCY

EVENT

EXP

PREV

IMPACT

9:30

GBP

Bank of England Feb Meeting Minutes

-

-

High

9:30

GBP

Claimant Count Rate (JAN)

3.6%

3.7%

Medium

9:30

GBP

Jobless Claims Change (JAN)

-20.0K

-24.0K

High

9:30

GBP

Average Weekly Earnings (3M/Y) (DEC)

1.0%

0.9%

Low

9:30

GBP

Weekly Earnings ex Bonus (3M/Y) (DEC)

0.9%

0.9%

Low

9:30

GBP

ILO Unemployment Rate (3M) (DEC)

7.1%

7.1%

Medium

9:30

GBP

Employment Change (3M/3M) (DEC)

250K

280K

Low

10:00

EUR

Eurozone Construction Output (MoM) (DEC)

-

-0.6%

Low

10:00

EUR

Eurozone Construction Output (YoY) (DEC)

-

-1.7%

Low

10:00

CHF

ZEW Survey (Expectations) (FEB)

-

36.4

Medium

Critical Levels

CCY

Supp 3

Supp 2

Supp 1

Pivot Point

Res 1

Res 2

Res 3

EUR/USD

1.3591

1.3666

1.3712

1.3741

1.3787

1.3816

1.3891

GBP/USD

1.6520

1.6607

1.6645

1.6694

1.6732

1.6781

1.6868

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com

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19 February 2014 07:36 GMT