In early morning trading, the US dollar is unchanged after trading lower yesterday. Yesterday’s dollar weakness occurred even as US ISM Manufacturing PMI data was better than expected. Traders were especially noting to 3.0% in the employment component of the PMI survey. On the news, US equities quickly moved higher, but the dollar was left out of the rally. Looking ahead, Forex traders will be awaiting today’s FOMC Minutes release. The FOMC data comes after traders have received mixed messages from FED members. Last week saw Chairman Bernanke sounding dovish, and all but signifying that further easing was in the cards. However, yesterday, Dallas Bank President Fisher stated that although tightening was a long time away, the Fed didn’t need to apply new stimulus at this time.
For traders, the key items to watch in the Minutes release are the Fed’s outlook on employment and housing, voting results from the FOMC Meeting, and any opinions about Europe and China. If the overall outlook is cautious, and the minutes show more worry than optimism, even as US economic growth continues to improve, Forex traders will probably then expect further easing actions. As a result, the dollar could see additional weakness this week, especially against the Yen and Gold.