The Federal Reserve Board and the Federal Open Market Committee on Wednesday, Aug 21 released the attached minutes of the Committee meeting held on July 30-31, 2019:

Information received since the Federal Open Market Committee met in June indicates that the labor market remains strong and that economic activity has been rising at a moderate rate. Job gains have been solid, on average, in recent months. And the unemployment rate has remained low. Although growth of household spending has picked up from earlier in the year. Growth of business fixed investment has been soft. On a 12-month basis, overall inflation and inflation for items other than food and energy are running below 2 percent. Market-based measures of inflation compensation remain low; survey-based measures of longer-term inflation expectations are little changed.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. In light of the implications of global developments for the economic outlook as well as muted inflation pressures. The Committee decided to lower the target range for the federal funds rate to 2 to 2-1/4 percent. This action supports the Committee’s view that sustained expansion of economic activity. Strong labor market conditions and inflation near the Committee’s symmetric 2 percent objective are the most likely outcomes, but uncertainties about this outlook remain. As the Committee contemplates the future path of the target range for the federal funds rate, it will continue to monitor the implications of incoming information for the economic outlook and will act as appropriate to sustain the expansion, with a strong labor market and inflation near its symmetric 2 percent objective.

In determining the timing and size of future adjustments to the target range for the federal funds rate. The Committee will assess realized and expected economic conditions relative to its maximum employment objective. And its symmetric 2 percent inflation objective. This assessment will take into account a wide range of information. Including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments.

The Committee will conclude the reduction of its aggregate securities holdings in the System Open Market Account in August, two months earlier than previously indicated.

What is the summary of the FOMC meeting?
  1. The FOMC did not provide a clear view of when the next rate cut will take place. They will continue to monitor the implications of incoming information for the economic outlook. And will act as appropriate to sustain the expansion, with a strong labor market and inflation near its symmetric 2 percent objective.
  2. FOMC confirms July’s rate cut was policy calibration.

Conclusion: If we combine the FOMC statement with technical analysis of USD Index. The dollar may consolidate for a while before the next rise (move). Or it may correct lower a bit. In general, the U.S dollar remains up but there’s a chance for possible short-term weakness in the coming days…

Economic data from the U.S will have a strong impact on the dollar in the coming days…(will give it a clear direction)…(Data from EuroZone is likely to bring a selling opportunity for EURUSD)…

USD Index Aug 22

MARKET DATA

UPCOMING ECONOMIC EVENTS