USD Strengthens after FOMC Minutes Increase Odds of a June Rate Hike

May 18, 2016 (Allthingsforex.com) – The FOMC meeting minutes gave the US dollar a boost in today’s trading session as policy makers felt that the Fed could raise rates as early as June, should economic data support the view that the world’s largest economy can withstand another increase in the benchmark rate.

“Participants agreed that their ongoing assessments of the data and other incoming information, as well as the implications for the outlook, would determine the timing and pace of future adjustments to the stance of monetary policy. Most participants judged that if incoming data were consistent with economic growth picking up in the second quarter, labor market conditions continuing to strengthen, and inflation making progress toward the Committee’s 2 percent objective, then it likely would be appropriate for the Committee to increase the target range for the federal funds rate in June.”- according to the official minutes transcript.

The EUR was already under pressure earlier in the session and was pushed even lower after the report. The shared currency may be in line to lose further ground with concerns over Greek debt negotiations, but more importantly, there is a feeling in Germany that default is inevitable. The International Monetary Fund pointed out that Greece is likely to miss its required surplus target and many economists believe that as an emerging economy and not a developed one, Greece should be allowed to seek help from the World Bank.

The refugee crisis, Putin’s aggression, slowdown in the economic recovery from 2007, the “Brexit” and the rise of EU-opposition parties across the continent are plaguing any progress and effort to keep the economic union intact. The Euro is now at its weakest level since April 20th.

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