iFOREX Daily Analysis : October 08, 2015

 | Oct 08, 2015 05:23AM ET

The dollar showed mixed results against other major currencies on Wednesday with gains expected to remain limited as investors continue to digest the fact that the Federal Reserve is unlikely to raise interest rates this year. The dollar remained under pressure by diminished expectations for a rate hike by the Federal Reserve this year in the wake of last Fridays unexpectedly weak U.S. jobs report for September. In the European front the single currency came under pressure after data showed that German industrial production fell at the fastest rate in a year in August, adding to concerns that a slowdown in global growth is spreading to the euro area’s largest economy. In Japan, the central bank refrained from expanding its stimulus program on Wednesday but there is still speculation that it could ease monetary policy at its October meeting. For today, the Bank of England is to announce its monetary policy decision and publish the minutes of its meeting, the ECB is to publish the minutes of its most recent meeting, and later in the day the U.S. is to release the weekly report on initial jobless claims. However, the main focus for today remains on the Federal Reserve minutes from its September meeting, a report viewed as one of the most anticipated due to the uncertainty surrounding a potential interest rate hike.

EUR/USD

The euro posted a slight drop against the dollar on Wednesday, as currency traders await the release of the minutes from the Federal Open Market Committee's September meeting for clues on whether the U.S. central bank will raise interest rates before the end of the year. The currency pair traded in a tight range between 1.1212 and 1.1284, before closing the day 0.32% lower. The FOMC has previously indicated that it had seen significant improvements in the U.S. economy since it last met in July, but also expressed concern that significant weakness in China and the global economy could restrain domestic growth. Nonetheless, Fed chair Janet Yellen still said it was likely the FOMC could hike rates by the end of the year. Prior to the minutes, market participants will be focusing on the Bank of England monetary policy decision, on ECB meeting minutes and on U.S. initial jobless claims.