Dollar pairs gains on dovish Fed speak, before ECB meeting
EUR/USD – Euro US Dollar
A: 1.1819 +0.0006 +0.05%
GBP/USD – British Pound US Dollar
A: 1.3773 +0.0005 +0.04%
A: 110.24 0.01 0.00%
The dollar pared gains on Wednesday as Treasury yields dipped after a Federal Reserve official offered a dovish outlook on the economy, and a day ahead of a European Central Bank policy decision.
He added, however, that it may be appropriate for the Federal Reserve to start reducing the pace of its asset purchases later this year if the economy continues to improve.
“The Fed is clearly in wait-and-see mode over the next couple of months to see how the economy holds up. Fed’s Williams delivered some dovish comments that support the idea that the soonest the Fed could taper is December,” – Fed John Williams.
The ECB may choose at its September meeting to reduce the pace of asset purchases under its pandemic emergency purchase program (PEPP). The backdrop: easier financing conditions, especially with lower bond yields.
Yet concerns that global financial conditions may tighten later this year around the likely start of the Fed’s taper of its asset purchases might persuade the ECB to leave the pace unchanged. In any case, we see this as an operational decision – and not the one sending a signal about future policy.
Oil settles up 1% on low U.S. output after hurricane
-About 80% of U.S. Gulf production is still offline.
-Refineries resuming operations quicker.
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