Yesterday the latest meeting minutes have been released from the Fed. Although no big change has been made, USD was slightly lower but soon regained its momentum. Currently, the DXY Index is trading at 92.75, up 0.11% since opening.
As the 10-year Treasury yield continues to go lower, reaching 1.3% last week, traders are behaving as if they have become less concerned with inflation risks. In the near term, analysts believe that divergence in monetary policies will become a key driver on the currency value. For example, NZD outperformed its major counterparts as more local banks projecting rate hikes by year-end. Moreover, Norway’s central bank has also signaled to raise interest rates in September. On the other hand, some central banks, such as the European Central Bank and Bank of Japan, kept their steady pace. For these reasons, some traders are looking for fresh opportunities in pairs such as EURNZD and NZDJPY.