How can FOMC Minutes Affect the US Dollar?

The Federal Reserve (Fed) is set to release the minutes from its September 17-18 policy meeting on Wednesday at 18:00 GMT. The meeting marked a significant shift in monetary policy as the central bank cut interest rates by 50 basis points, the first reduction in over four years.

While the market anticipated a rate cut, the larger-than-expected reduction took many by surprise. The Fed acknowledged progress in inflation but expressed concerns about slowing job growth. Following the announcement, market participants increased their bets on another rate cut in November.

The release of the minutes may influence the US Dollar (USD), but the recent strong employment data could limit its impact. Technically, the US Dollar Index (DXY) is currently trading above the 102.00 mark, indicating a bullish trend. However, a short-term correction towards 102.00 is possible before the minutes release. Breaking above the 103.00 level could signal a stronger upward move.

Overall, while the Fed minutes may provide additional context for the September rate cut, the recent economic data, particularly the strong employment report, is likely to have a more significant impact on market sentiment and the US Dollar.