The US dollar is so weak that even the almighty Fed could not encourage another greenback rally. Market participants were tensely waiting for the release of the minutes from the last Fed’s meeting. Most investors believed that the released data would provide substantial support to the US currency. But they were wrong.
After the minutes were published, the US dollar, on the contrary, began to fall. It happened due to disagreement on the key interest rates. The minutes not only left this issue unanswered but also added even more confusion. The Fed’s officials could not reach a common ground. Some of them think that the current inflation is quite low and it is not time to raise the funds rate. Others believe that it is necessary to hurry, and if the funds rate remains unchanged in the near future, it can bring very serious negative consequences. Basically, that is all you need to know about the recent meeting of the Fed. Opinions are divided; the minutes did not give an answer to the main question whether rates will be raised this year. The second important point is reduction of the Fed’s balance sheet. Officials also failed to make a final decisions on this matter.
Analysts came to the conclusion that Fed officials are likely to discuss when to start selling assets at the next meeting, but the sale itself will not begin until next year. If this happens, the dollar can finally start to grow steadily. In addition, the US Department of Treasury plans to launch a program to support dollar in October. So, the American currency has all chances for rapid growth.
