Lee Hardman, Currency Analyst at MUFG, suggests that the minutes from the latest FOMC meeting were released overnight but offered little fresh insight which is understandable given that the Fed has already communicated actively with market participants in the interim to explain the more cautious outlook for monetary policy normalization. Key Quotes “Fed Chair Yellen signalled clearly in her speech at the end of last month that given the risks to the outlook, the Fed is likely to proceed more cautiously in adjusting policy. The minutes highlighted clearly that FOMC participants judged that downside risks to economic growth and inflation have increased. The number of FOMC participants who judge that risks to growth are broadly balanced is now roughly similar to the number of who see risks as weighted to the downside marking a more dovish shift. The dovish shift was more notable amongst FOMC participants’ assessments of the risks to the outlook for inflation. The majority of participants now judge that risks are weighted to the downside. The main concern amongst FOMC participants were negative external risks. It was highlighted by the use of the word “global” which was mentioned twenty three times in the minutes. The minutes reinforce the dovish signal from the Fed that it is in no rush to resume raising rates in the near-term which will keep the US dollar on the defensive. US dollar weakness could and may already be overshooting key fundamental drivers in the near-term until there is a less dovish shift in policy stance from the Fed. Market participants will be looking for any further catalyst which may weaken the US dollar further when Fed Chair Yellen takes part in a discussion today with former Fed Chairs Bernanke, Greenspan, and Volcker.” For more information, read our latest forex news.