2016-10-13 12:19:34

The USD is rising today after yesterday’s release of the minutes of the last FOMC meeting.

The minutes showed that FOMC members have different opinion about the timing and the pace of the interest rate increase in the USA. However, majority of the Fed leaders believes that the rise in the rate would be appropriate before the end of this year.

Now, market participants expect the rate hike in December, although a meeting devoted to this issue will be held on 01-02 November. According to the minutes, the reasons either in favor of the rate hike or against it would be given at this meeting; in the latter case, the Bank might require additional positive data on the labor market and inflation.

The USD index WSJ, which shows the position of the USD against a basket of 16 other currencies, has grown by 0.1% to 88.40 on Wednesday. On Wednesday, probability of the rate hike by the Fed is 70%, according to the analysis of interest rate futures made by CME Group. Yesterday, American stock indices hardly reacted to the FOMC minutes.

However, at today's Asian session, the US indices significantly dropped.

The decline in the indices was also caused by the fall in oil prices after the new peak reached earlier this week due to information about ongoing discussion by OPEC the conditions to reduce oil production and also after the speech by President of Russia Vladimir Putin in Istanbul.

The index S&P500 fell by 1% at the beginning of European session and is traded now at support level of 2119.0 (see "Technical analysis of 13.10.2016").

Today some US news will be released as follows:

At 15:30 (GMT+3): initial applications for unemployment benefits in the USA for the last week. If the index exceeds expectations it will show the decline in the US labor market, which will negatively affect the USD. Previous index was at the level of 249 000 and the forecast is 254 000.

US prices indexes of export/import September will be also known today.

At 15:30 a speech of the head of the Bank of England.

At 19:15 a speech by FOMC member Patrick Harker. Speeches by Carney and Harker will add volatility to in the financial markets.

S&P500: American investors prefer to take profit. Fundamental analysis of 13.10.2016