EUR/USD has posted small gains in the Wednesday session. Currently, the pair is trading at 1.1590, up 0.17% on the day. In economic news, there are no major eurozone events. In the U.S, Existing Home Sales is expected to improve to 5.40 million. As well, the Federal Reserve will publish the minutes of the policy meeting earlier this month. On Thursday, Germany and the eurozone release PMI reports and the ECB will publish the minutes of its July meeting. The U.S will release unemployment claims.
All eyes are on the Federal Reserve, which publishes the minutes of its meeting from August 1. The Fed statement from that meeting described the economy as “strong”, the first time it used that term since 2006. Fed policymakers reiterated their commitment to raise interest rates gradually, as economic conditions remain strong. In the second quarter, GDP grew 4.1%, inflation has moved closer to the Fed’s target of 2%, and unemployment remains at record lows. The minutes are expected to underscore the Fed’s intent to raise rates twice more this year, in September and December. The Fed’s approach to rate hikes appears economically sound, but enter the undiplomatic President Trump, who has criticized the Fed, saying he was “not thrilled” with higher rates. Trump’s comments have fuelled the euro’s rally, as the currency pushed above the 1.16 line on Wednesday, for the first time since August 9.
On the heels of the release of the Fed minutes, the heads of the central bank will gather in picturesque Jackson Hole. Wyoming. Investors will be keenly following, looking for hints regarding future monetary policy on the part of the ECB and the Federal Reserve. The U.S economy continues to show strong growth but inflation and wage growth continue to lag, and Fed chair Jerome Powell will be expected to address these issues.
