Dollar surged broadly as Fed delivered more hawkish than expected FOMC minutes overnight. The FOMC minutes for the July meeting unveiled that policymakers had detailed discussion of the exit strategy. The Fed has also planned to officially update their exit principles later this year. We expect to see the update in September. On the economic outlook, the member acknowledged the improvement in the job market. Yet, they remained divided over whether the unemployment rate served as an accurate indicator of the labor market conditions. The staff revised potential growth lower and inflation higher while expecting inflation to stay below the Fed's mandate for several years. The staff also lowered the unemployment rate forecast in response to the faster decline in the unemployment rate.
Commodity currencies, including Aussie, Kiwi and Loonie, are additionally pressured in Asian session after manufacturing data from China. The preliminary HSBC PMI manufacturing dropped to 50.3 in August versus expectation from 51.5, down from prior month's 51.7. HSBC noted that while the economic recovery in China is "still continuing", "its momentum has slowed again". And it noted that "more policy support is needed to help consolidate the recovery".
Elsewhere, Australia conference board leading indicator rose 0.4% in June, Japan manufacturing PMI improved to 52.4 in August. PMI data will be a major focus in European session today as France, Germany and Eurozone will release both PMI manufacturing and services. Swiss will release trade balance. UK will release retail sales and public sector borrowing. US will release jobless claims, leading indicators, Philly Fed survey and existing home sales.