EUR/USD, USD/JPY flows - USD Waits for FOMC Minutes
The USD is steady in early European trading Wednesday, after the EUR bounce on Tuesday.
USD/JPY choppy sideways movements shows that the USD needs a catalyst. Lower oil prices and U.S. Treasury yields Tuesday have partially been reversed today with new Houthi attacks and concerns over shipping through the Red sea prompted a rotation higher in oil prices. The September FOMC meeting is next in focused, with traders looking for clues on December and into 2027 with an October hike seen as unlikely.
EUR crosses have stabilised meanwhile, with the focus remaining on the 10yr French-German government bond spreads. Further narrowing could help EUR sentiment further, but the National Rally will likely ask for some of their politically sensitive expenditure cuts, which could led to disagreement when the debate starts in earnest on October 13.