Forex Today: Dollar retreats on growth optimism ahead of Biden, FOMC minutes
Here is what you need to know on Wednesday, April 7:
The market mood remains upbeat amid better growth expectations. The drop in US yields is dragging the dollar down. President Biden is set to provide an update on his spending plans and investors eye the Fed's minutes to see if there is a tendency to raise rates. Cryptocurrencies are consolidating previous gains.
The International Monetary Fund (IMF) boosted its global growth forecast to 6%, yet noted divergences between countries. Vaccination campaigns and fiscal stimulus are behind the upgraded projections.
The US dollar is on the back foot as US Treasury yields dropped to around 1.65% as investors buy bonds after the previous sell-off related to upbeat US data. The latest such figure was the JOLTs job openings, which smashed estimates with 7.4 million in February.
US President Joe Biden is scheduled to deliver remarks on his proposed infrastructure and tax program. Democrats will be able to pass such the $2.25 billion scheme without Republican support according to a ruling by the Senate parliamentarian. Negotiations within the party are critical to its passage.
The Federal Reserve's meeting minutes from its March meeting may shed some light on how many members see interest rate hikes coming sooner rather than later. The Fed is more optimistic than beforehand but urged caution.
See FOMC Minutes March 16-17 Preview: Growth without inflation?
GBP/USD trades close to 1.38, consolidating its falls despite Britain's upbeat vaccination campaign, which will receive another shot in the arm from the usage of Moderna's vaccines.
EUR/USD took advantage of the upbeat mood and topped 1.1850 on Tuesday after the EU brought forward vaccine projections. The bloc aims to surpass half of the population by the end of June. On the other hand, concerns about AstraZeneca's jabs persist. An update about a potential link between the inoculations and blood clouds is due out later in the day.
WTI Oil edged up toward $60 amid better expectations for global growth, but prospects of Iran coming back online weigh on prices. Oil inventory data is awaited.
Cryptocurrencies: Several altcoins such as XRP, Cardano, Binance Coin, and also Ethereum have been consolidating their gains after surging earlier in the week.
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