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Dollar Erases Gains Before Fed Minutes; Euro Jumps: Inside G-10

April 7 (BLOOMBERG) - The dollar erased an advance as U.S. stocks hovered near records.


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Investors are eyeing Federal Reserve minutes from its March meeting expected to provide insight into policy makers’ views on asset tapering. The euro extended its advance to touch a fresh two-week high.

  • The Bloomberg Dollar Spot Index little changed; among G-10 counterparts, the Swiss franc touched the highest in two weeks, while the pound fell to the lowest in a week
  • EUR/USD +0.2% to 1.1902 vs session high of 1.1903; breached its 200-DMA of 1.1891; pair may be capped by Thursday option expires at 1.1900-1.1910
  • EUR/GBP +0.6%, up for a second day
  • Hedge funds are closing EUR/GBP shorts, as the pair sees demand from corporate accounts, a trader says
  • GBP/USD falls 0.4% to 1.3750; sank to lowest since March 31; came close to its 55-DMA of 1.3841 before retreating amid doubts about Boris Johnson’s plans to reopen the economy
  • If the pair slips below 1.3686, a level last seen on March 25, then the next range to watch is in the 1.3500s, with an eye toward 1.3452, the lowest this year, said Juan Perez, FX trader in Washington D.C. at Tempus, a global FX payments company
  • Resource-linked currencies were among the weakest in the G-10, with the Canadian and Australian dollars pressured by the drop in oil and a key gauge of commodities
  • USD/CAD rose 0.5% to 1.2622; U.S. dollar put options worth $750 million against the Canadian dollar at 1.2600 strike expire April 9

(Some information comes from FX traders familiar with the transactions who asked not to be identified because they are not authorized to speak publicly)


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