Welcome to Thursday, traders! Yesterday, the FOMC meeting minutes provided important insights into the Federal Reserve’s stance on inflation and interest rates. The minutes revealed that Federal Reserve officials agreed they needed to see more evidence of declining inflation before considering any further rate cuts. Additionally, they expressed concerns about the impact of President Donald Trump's tariffs, which they fear could complicate inflation control efforts. This cautious tone contributed to weakness in the U.S. dollar.
Today, the economic calendar started off with employment change data from Australia, which was significantly better than expected, coming in at 44,000 new jobs compared to the 20,000 forecast. This positive data has fueled strength in the Australian dollar, continuing its bullish momentum from earlier this week.
Looking ahead, the focus will shift to U.S. unemployment claims, which could provide further direction for the American dollar.
On the currency market, the Australian dollar is showing strength, joined by the New Zealand dollar, but the best performer today is the Japanese yen. Conversely, the U.S. dollar remains weak, extending its losses from yesterday. This combination has led to USD/JPY dropping to its lowest level since December 9, reflecting a significant decline.
The weaker dollar is also supporting precious metals, with gold and silver climbing higher. However, in the energy sector, oil continues to struggle, showing no signs of a bullish reversal at the moment.
In the indices market, futures are in the red at the end of the Asian session, but long-term sentiment remains positive, with indices trading at or near all-time highs. Despite today’s slight bearish start, the overall bullish trend in equities is still intact.
With a mix of strong employment data from Australia, U.S. unemployment claims later today, and ongoing weakness in the U.S. dollar, traders should be ready for potential volatility across currencies, commodities, and indices.