ForexLive Americas wrap: Hawkish minutes boost US dollar via ForexLive

Forex headlines for August 20, 2014:

• FOMC Minutes: Many Fed officials said job gains could bring sooner rate rise
• Full text of the FOMC minutes
• Hilsenrath: Rate-hike debate heating up
• Obama says US will be ‘relentless' in taking fight to ISIL
• June 2014 Canadian wholesale trade 0.6% vs 0.4% exp m/m
• Richard Branson hoping to save the day in Russian/Ukraine tensions
• Russian *ahem* food inspectors orders closure of 4 McDonald's restaurants in Moscow
• German exports to Russia fall by 15.5% in first half of 2014
• Separatists shoot down fighter plane in Eastern Ukraine
• WTI crude up $1.59 to $96.07
• Gold down $5 to $1291
• S&P 500 up 5 points to 1987
• USD leads, JPY lags

The day built up toward the FOMC minutes and the market, for the most part, was able to sniff out that it was more likely to hit a few hawkish points. The headlines were probably more hawkish than the text but the US dollar is in full flight at the moment and good news is like rocket fuel while bad news is ignored.

USD/JPY broke out yesterday and continues to steam higher. A dip down to 103.20 in early US trading was quickly picked up and the pair was at 102.35 before the minutes. The headlines quickly boosted the pair through the 103.40 session high and all the way up to 103.85. The April high at 104.15 is now in easy striking distance. Yellen looms.

Cable really stands out once again for its failure to make any progress despite some good news. The BOE minutes boosted the pair 80 pips to 1.6680 but shortly after US trading began so did the trading and it was a slow bleed lower than was completed after the FOMC minutes. Last at 1.6597, near a new cycle low.

AUD/USD was an good performer in the early going as traders scrutinized Stevens and decided he wasn't as dovish as he could have been. Part of if was that he essentially ruled out a rate cut “unless something changes”. It hit a session high at 0.9318 but then skidded to a session low of 0.9276 after the minutes. It ‘s bounced a bit and showed some resilience over the past two weeks. China PMI later will be the next chapter.

USD/CAD is all about the technicals at the moment. The FOMC minutes added at 20 pip boost to 1.0972 but the sellers at 1.0980 and up to 1.1000 are lurking. Could be an epic battle and I think the winning side could take the next 200 pips.

Bottom line: It's great to see some decent volatility in the market, a few months in the summer felt like the dark ages.

posted via ForexLive