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MTrading Team • 2022-08-17

Volatility prevails ahead of US data, FOMC Minutes

Volatility prevails ahead of US data, FOMC Minutes

Global markets witness an active start to the key day comprising Fed Minutes and US Retail Sales during early Wednesday. Also contributing to the volatility were the RBNZ and Aussie wage data, not to forget UK inflation figures.

With this, the US dollar and the Treasury yields regain traction and exert downside pressure on prices of gold and crude oil.

AUDUSD became the biggest loser among G10 currency pairs while GBPUSD occupies the other extreme. Further, USDJPY came in second whereas the NZDUSD failed to cheer RBNZ’s 0.50% rate hike.

Cryptocurrencies snap a three-day downtrend amid news surrounding Google’s investment and hopes of genuine traders’ existence to likely ease the environment for the BTCUSD and ETHUSD.

Following are the latest moves of the key assets:

  • Brent oil prints four-day downtrend at the lowest levels since late January, down 0.35% intraday near $94.00 at the latest.
  • Gold extends the week-start pullback while posting 0.11% intraday losses near $1,773.
  • USD Index regains upside momentum after reversing from monthly top, up 0.16% daily around 106.70 by the press time.
  • DAX and Eurostoxx print mild gains but FTSE 100 retreats from two-month high.
  • Wall Street closed mixed with Dow Jones’ surprise 0.71% daily gains.
  • BTCUSD and ETHUSD both print the first daily gains in four as buyers attack $24,000 and $1,900 at the latest.
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US dollar bulls return as many catalysts fail to impress optimists

Be it Australia’s softer Wage Price Index for the second quarter or the RBNZ’s resistance in signaling a stronger rate hike, not to forget the 40-year high UK CPI, everything pushed the US dollar back on the driver’s seat as traders prepare for today’s FOMC Meeting Minutes. Also keeping the greenback firmer were the recently increasing hawkish Fed bets.

It’s worth noting, however, that the 14-year high of the two-year UK government bond yields stopped the GBPUSD bears despite the firmer US dollar. Also, China’s readiness to infuse markets offered a reason for the oil price to bounce off a nearly seven-month low.

Elsewhere, Europe’s push Iran trade deal challenged the equity bears despite looming Fed Minutes and US Retail Sales data.

Talking about cryptos, news that Google has invested around 1.5 billion since last September and a chain analysis signaling a major slump in crypto scams appear to have triggered the rebound in the prices of BTCUSD and the ETHUSD.

⏫ 🟢 Strong buy: USDJPY

⏬ 🔴 Strong sell: ETHUSD

⬆️ 🟢 Buy: USD Index, USDCAD, Nasdaq

⬇️ 🔴 Sell: DAX, FTSE 100, gold, BTCUSD

All eyes on Fed Minutes

The US Retail Sales and recession talks could entertain traders during the busy Wednesday, not to forget EU GDP and employment data. However, major attention will be given to the Fed’s Minutes of the latest monetary policy meeting as the lawmakers have been signaling an end of major rate hikes. Even so, interest rate future print nearly 40% odds of a 0.75% rate hike in September. Hence, traders will keep their eyes on the Fed minutes for clear directions. Should the outcome appear in favor of further rate increases, without much caution on the economic stand, the US dollar could reverse the weekly losses.

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