Yesterday (18/11), EUR/USD fluctuated strongly before closing in positive territory. Ending the session, the pair closed at $1.06587, up 0.13% above the opening price $1.06450.
Ahead October Meeting Minutes of the US Federal Reserve (Fed) released, investors sold dollars to take profits, causing the green back to deep discounts. From 5 am to 11 am GMT+2, Euro increased 0.6% to $1.06903, before turning down.
Minutes of the meeting on 27-28 / 10 shows that the majority of Fed policy makers were concerned that the rate hike in December was “quite reasonable”. In addition, members also agreed that the financial situation of the world economy will not impact too much on the economy of the world No.1.
However, Fed officials seem to be divided into three “camps” in deciding the time to raise interest rates. While some delegates said, the conditions necessary for tightening has been achieved, the majority of other officials argued that these elements can’t be achieved until December. Others, however, thought the data in December will not guarantee that the Fed will raise interest rates.
Besides, the Fed is trying to pull the focus of the market from having to raise interest rates in December or not, to a rate hike route. But time can not be agreed, but the meeting minutes showed Fed consensus acted slowly, to be sure not to shock the market and curb US economic growth.
While market expectations in October Meeting Minutes will send out a strong message about the Fed raising interest rates at a meeting in December, then what was announced in Washington yesterday may say, has made investors disappointed, which put pressure on USD and support the EUR to go up.
Today, the market focus is the minutes of the meetings of the ECB board, investors still believe that the ECB will take additional measures to strengthen the easing of 3/12 day meeting next month. There will be many scenarios as buying municipal bonds, lowering lending rates … in order to promote regional Euro zone economy . The common currency is under downward pressure.
Currently, at 14:35 pm GMT+7, the EUR/USD is trading at $ 1.06805, up 0.22% compared with the opening price $1.06575.
Forecast: In the long term, the Euro is still on track to plunge due to pressure strengthening ECB easing early next month. If the minutes of the meeting released at 7:30 pm GMT+7 shows the clear dovish message , the pair may drop below $1.06300.
However, in the context of the Fed’s decision must depend on economic data to December 12 as indicated in the Minutes, Euro could be supported going up, likely to close above $1.07100.