USD Retains FOMC Minutes Boost

The US dollar continues to trade to the upside over the final European session of the week. The FOMC minutes released on Wednesday saw market pricing for a rate cut in September reduced. Over the final trading day of the week, the focus is on Fed Chairman Powell who is speaking today at the Jackson Hole Symposium. USD index trades 98.20 last with price still fighting to get back above the 98.27 resistance.

ECB Easing Expectations Grow

EURUSD has ended the week in the red as ECB easing expectations increased in response to the release of the July ECB minutes. The minutes saw policymakers striking a much more pessimistic tone over the inflation and growth outlook. Indeed, the majority of policymakers expressed their support for a package of measures instead of a single action. The market is now widely expecting September easing. EURUSD trades 1.1066 last, with price sitting just above the 1.1025 support.

GBP Higher On Brexit Hopes

GBPUSD has fought hard this week to trade up to the upside. However, the move has been labored and remains corrective. GBP was boosted yesterday as Angela Merkel backtracked over her apparent 30-day Backstop deadline to Boris Johnson. Johnson met with Merkel and Macron of France and will continue to work with the leaders to try and deliver a backstop solution which could allow for a Brexit deal. GBPUSD trades 1.2217 last, with the bias remaining bearish while below 1.2382.

Equities End Week Higher

Risk assets have continued their recovery this week. However, for now, price remains below the 2942.60 resistance. Optimism around ongoing US/China trade talks, as well as expectations of further central bank easing, have helped keep equities bid across the week. SPX500 trades 2931.63 last.

Crude Capped By Trend Line

Oil prices have come back under pressure today, despite the general improvement in risk appetite. A stronger USD has taken the shine off this week’s EIA report which showed a second consecutive drawdown in US crude inventories. Crude trades 55.25 last, having been capped once again by the bearish trend line from July highs.

High Betas Low Down

USD/CAD has been higher again today as weaker oil prices and a stronger USD weigh on CAD. USDCAD is trading 1.3320 last, with the FOMC minutes having helped boost price back above the 1.33 level which remains the key near term pivot. While above this level, focus remains on further upside.

AUD/USD has drifted quietly to the downside over a quiet week. While the market is remaining optimistic around the US/China trade story, weakness in gold prices and a stronger USD have weighed on AUD which is now once again testing the .6758 level support.