US Dollar Rallies Following The Release Of The FOMC Minutes

By Adrian Robles,

Today the FXCM USDollar Index (Ticker: USDollar ) rallied after therelease of the Minutes from the June FOMC meeting. The Minutesreiterated the information that was given in the FOMC’sstatement and Fed Chairman Ben Bernanke’s press conference onJune 20 th . The statement and thespeech outlined that the Fed would be holding interest rates at0.25 percent, and announced the extension Operation Twist. Theevent shattered some trader’s hopes for a more likely pathtowards a third round of the Quantitative Easing.
  • Chart Created By Adrian Robles, GMT 5 min created in MarketScope
  • The US Dollar Index rallied 30 points following the release of the FOMC Minutes. The price action following this event risk came at some surprise given that the Minutes did not offer any new information. This suggests the market was expecting further progress towards the acceptance towards and implementation of additional stimulus. The pop in the US Dollar suggests that traders are currently more concerned about the stability of the currency than the economic growth of the underlining country. As such the market is likely to have a risk aversion atmosphere until a policy authority announces further accommodation or data show a significant recovery.
DailyFX is the forex news and research arm of FXCM, Inc (NYSE: FXCM), which provides currency trading and brokerage services and is an advertiser on TheStreet websites. Any opinions, news, research, analyses, prices, or other information is provided as general market commentary, and does not constitute investment advice. Dailyfx will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. Currency trading involves significant risk of loss. Individual authors may hold positions in the currencies discussed in the article.

Original Article: http://www.dailyfx.com/forex/market_alert/2012/07/11/US_Dollar_Rallies_Fallowing_the_Relase_of_the_FOMC_Minutes.html

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