iFOREX Daily Analysis : April 07, 2016

 | Apr 07, 2016 05:08AM ET

The dollar fell against most major currencies on Wednesday, pressured by minutes of the U.S. Federal Reserve's meeting last month that urged for caution about future interest rate hikes. Minutes from the Fed's March policy meeting suggested that the central bank appears unlikely to raise interest rates before June due to concerns over the limited ability to tackle a global economic slowdown. The minutes showed debate over whether they might increase rates in April with "a number" of policymakers arguing that headwinds to growth would probably persist, and many urging caution about raising rates. At the meeting, the FOMC voted 9-1 to hold its benchmark Federal Funds Rate at a targeted range between 0.25 and 0.50%. In contrast with the Fed, Bank of Japan policymakers will likely debate the possibility of easing further at their April 27-28 meeting, as recently downbeat economic data has failed to reinforce their expectations that a moderate economic recovery would lift inflation towards their 2 percent target. Today, The U.K. is to release data on house price inflation, the European Central Bank is to publish the minutes of its latest meeting and the U.S. is to publish the weekly report on initial jobless claims.

EUR/USD

The euro posted a slight increase against the dollar on Wednesday after the minutes from the Federal Reserve's March meeting on Wednesday afternoon which showed that the U.S. central bank, was divided on whether it will be appropriate to raise short-term interest rates at the end of this month. The currency pair traded in a tight range between 1.1327 and 1.1431, before settling 0.14% higher for the session. When the Federal Open Market Committee last met in mid-March, several members wanted to consider the possibility of raising interest rates at the meeting, while leaving a potential rate hike on the table when they meet again on April 26-27. The majority of the members expressed caution at raising rates prematurely due to concerns that global economic headwinds will only subside slowly in the near future. Today, the European Central Bank is to publish the minutes of its latest meeting and the U.S. is to publish the weekly report on initial jobless claims.