The dollar has stabilized after a massive sell-off fueled by Trump’s attack on Fed policy and comments by central bank official Kaplan, who hinted at a pause in tightening. The greenback demand is reemerging gradually ahead of the FOMC meeting minutes release due later today.
As such, EUR/USD retreats marginally from highs in the 1.16 region, with the 20-DMA at 1.1535 is back on traders’ radars. Market participants expect a hawkish tone from the Fed minutes despite Trump’s recent criticism as the central bank itself is an independent institution and the economic fundamentals remain solid and justify further rate hikes.
So if the Fed doesn’t disappoint the dollar bulls, EUR/USD could accelerate the emerging downside correction and challenge the 1.15 support. The stakes are also getting higher for a delivery from Powell at Jackson Hole due on Friday. The expectations of this event could also support the greenback in coming days.