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Dollar creeps up as Fed minutes set to hit forex news

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Dollar signThe US dollar appears to be returning to its previous position as a safe haven as it saw two consecutive days of welcome rises.

The development came after some Wall Street indices went up by over 2% yesterday – leading to increased confidence in both the US economy and its currency.

As a result, the dollar index, which measures the greenback’s performance relative to a basket of six other currencies from around the world, rose by 0.1%. It hit 95.15 at one stage, although that is still lower than its peak this year of almost 97, which it reached just two months or so ago.

However, there may be trouble ahead for the dollar as the day goes on.

The Federal Reserve releases the minutes of its most recent meeting later today, which means that investors and traders were somewhat cautious moving their money into the dollar overnight.

However, any potential problems for the dollar may soon seem insignificant compared to those facing other global currencies.

The British pound went down by 0.2% compared to the dollar this morning and hit $1.3158. This is in large part due to the crucial European Union summit taking place today between Prime Minister Theresa May and other EU leaders.

As the week hits its midpoint, there’s still a lot for traders to look out for.

Chinese markets may be a little slow today given the Chung Yeung Festival taking place, as banks will close.

Housing data is set to come out of the US around lunchtime. Data on September housing starts will be out at 12.30pm GMT, with the month on month change expected to plunge from 1.282 million to 1.237 million.

American building permits data for September, however, are expected to rise somewhat from 1.249 million to 1.280 million, suggesting that a rise in American housebuilding could be on the cards in the future.

Several European central bankers will be speaking this afternoon. Jens Weidmann, who is the president of the Deutsche Bundesbank and on the Governing Council of the European Central Bank, will speak at 4.30pm.

Ben Broadbent, who sits on the Monetary Policy Committee of the Bank of England, will speak at 5pm GMT.

Looking ahead to tomorrow, the long-awaited Brexit summit in Europe will continue – with both sterling and the euro likely to be vulnerable to political shocks.

Several significant Australian data pieces are due out overnight. Employment change levels for September are expected to shift downwards from 44,000 to 15,000 when they are released at 12.30am GMT, although the overall unemployment rate is believed to be ready to stay constant at just above 5%.

More central banker speeches will be on the way later in the day, including one from Randal Keith Quarles the Vice Chair for Supervision on the US Federal Reserve’s Board of Governors. He will speak at 4.15pm GMT.

On Friday, the main events are likely to include significant Chinese information releases, including a predicted year on year gross domestic product rise for the third quarter from 6.6% to 6.7%.