Dollar Reacts to FOMC Minutes on Policy Divergence — GBP/USD and EUR/USD Next Move?

Currencies Assess FOMC Minutes Amid Policy Divergence
The U.S. dollar, the euro, and the pound are showing signs, as at the 9th day of July, that markets have processed new information released today by the FOMC minutes, on monetary policy discussions of the Federal Reserve concerning inflation, unemployment, and policy setting. Core price pressures were described as still being a concern in the FOMC minutes and supported a dollar that was expected to gain due to expected policy easing.

The European currency is facing growth heterogeneity within the euro zone and the European Central Bank’s pursuit of price stability. National budget disparities and divergent inflation rates across member states are creating a currency that is vulnerable to differences in growth, inflation rates, and monetary policy transmission.