The US dollar weakened further Wednesday due to a slight drop in consumer inflation – a key indicator for the US Federal Reserve when considering the ate to raise interest rates. This slight drop meant that questions surround the possibility of a September interest rate lift off. The meeting minutes suggested that most of the members of the Federal Reserve felt that the “conditions for a rate-hike were getting closer”; however, the officials also highlighted concerns including the Chinese economy and a sustainable labour market. Moreover, the central bank shifted its rhetoric towards a focus on inflation, stating that the members need to see inflation heading further towards its target before considering an interest rate-hike. As a result, market estimates for when the US will look to raise interest rates have been pushed back especially in light of the lower than expected inflation data released yesterday.
Following the Federal Reserve minutes last night, today we look forward to both the weekly unemployment claims and existing home sales data. Unemployment claims are expected to show a very small drop on the previous week, continuing to show positivity in job opportunities. Existing home sales is also expected to show a slight drop on the previous month.