Caution remains the watchword this morning, as markets are waiting to parse the minutes of the latest FOMC meeting to be released at 2 p.m. Meanwhile, the U.S. Consumer Price Index was published at 8:30 a.m., whereas USD and crude oil inventory figures posted at 10:30 a.m. ensured a volatile morning for the loonie.
Let us remember that the last FOMC meeting took place when crude oil was trading at more than $50 a barrel and before the most recent devaluation of the yuan. At the time of writing, the Futures market is predicting that the odds for a key rate hike in September are at 50% and at 73% for a hike before the end of the year. Speculations surrounding the actions of the Fed are having a major impact on emerging nations, and some of their representatives are openly calling for action as soon as September, in order to end the uncertainty.
In response to the recent devaluation of the yuan, Vietnam has chosen to follow suit and also devalued its currency by 1%. In the past month, the rouble and the Turkish lira have fallen by 13.2% and 8.8% respectively against the greenback. For their part, the loonie and the euro are stable against the U.S. dollar.
Have a good day!
- Range of the day: 1.3000 - 1.3145
Emmanuel Tessier-Fleury