US Dollar's rally attempt lost momentum after the release of FOMC minutes for April 29-30 meeting. The minutes were considered a bit dovish by the markets with indication that Fed isn't in hurry to start normalization of interest rates. Exit strategies from QE were discussed and its generally agreed that a mix of tools would be used to normalize rates. The mix includes overnight reverse-repurchase agreements, term deposit facilities and interest on excess reserves. And, there was consensus that Fed would need to improve the forward guidance on the path of interest rates. Regarding the economy, Q1 real GDP growth was "slower than in the projections for the March meeting". But, the Fed's staff assessment was the that weakness in Q1 was "largely transitory" and there would only be little revision to Q2 growth projections. "Unemployment rate was expected to decline gradually to the staff's estimate of its longer-run natural rate." Staff projections for inflation was "basically unchanged" and inflation would remains below 2% target "over the next few years". Risks to staff projections were "roughly balanced".
Separately, Minneapolis Fed Kocherlakota urged Fed to "do better" to boost inflation and push down unemployment rate. He said inflation would take as long as four years to climb back to the 2% target. And, the current 6.3% unemployment rate overstated the nature of improvement in the employment market. Meanwhile, he also said that Fed is not poised to unveil a revised exist strategy any time soon. The discussions during last meeting, as revealed in the minutes, was " all about prudent planning". Fed chair Yellen spoke to graduates during New York University's comments ceremony. She hailed former Fed chair Bernanke's "grit and willingness to take a stand". But, nothing special about policy was revealed.
On the data front, the China HSBC PMI manufacturing improved much more than expected to 49.7 in May. Australia consumer inflation expectations rose 4.4% in May. PMI will be a main focus today as France, German and Eurozone will release PMIs. Weak data there will further solidify the case for the ECB to ease policies in June, which is expected. The UK will release the GDP revision and public sector net borrowing. Canada will release retail sales later today. And, the US will release jobless claims, existing home sales and leading indicators.