The dollar encouraged by the hawkish FOMC protocols

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The us dollar continued to rise on world markets after hawkish FOMC protocols.Fed members agreed on the need for further tightening of monetary policy that brought the U.S. currency its growth momentum. The dollar index climbed to a week and a half highs (95.42), because the records are updated by the momentum of the markets to buy. Formally, in the current policy bias is nothing new, as the same position fed was announced during a press conference in late September after the rate increase, which led to the growth of the American currency by 2% in the subsequent week.
However, the growth momentum of the dollar then dried up. Partly, in the Wake of the return of demand for risks after a sharper sell-off in equity markets last Wednesday and Thursday and partly because of the constant pressure on the fed from the trump. Commitment to further tightening policy once again shows the independence of the American reserve system.
Trump called the fed “the main threat”, which is ironic, since the President himself and created it. He suggested Powell as head of the Central Bank, and his administration is recommended to appoint a number of senior officials in the FOMC. Now they are all unanimous on the position that trump criticizes.
Among important publications should also be noted semiannual Treasury report on currency where no one country was named a “currency manipulator”. This caution, despite the trade wars and a sharp weakening of the yuan in recent months, may be considered as a desire not to unnecessarily escalate the pressure on China, leaving the possibility for negotiations on trade.
The EURUSD failed to 1.1500, where in the beginning of the month received support. The rate for the Chinese offshore yuan (CNH) fell into the area of local lows at 6.93 per dollar. The strengthening of the USD on global markets could cause a new wave of weakening of currencies of developing countries. In respect of the Renminbi, should pay attention to the dynamics close to the 6.96 – the level at which the IBO in August intervened in defense of the course.
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Alexander Kuptsikevich,
Senior analyst,
FxPro