The minutes of the US Federal Reserve meeting two weeks ago, issued yesterday, Wednesday, the fifth of January, supported the tightening of monetary policy from the US Federal Reserve in response to the rise in inflation, as expectations for the members of the US Federal Reserve showed that it increased by 3 times during the current year and another three times in the next year 2023 to support the rise in the yield on US Treasury bonds and thus a rise U.S. dollar .

The minutes of the US Federal Reserve stated that the participants and members of the Fed believe that the current size of the balance sheet is too high and that it should be reduced after a short period of raising interest rates, and the Fed members did not show any concern about Omicron and its impact on the current state of recovery.

Markets are currently pricing in an opportunity above 71.3%, according to FedWatch’s CME Group instrument, with a rate hike in March. The yield on US 10-year Treasury bonds is trading at a two-year high of 1.7% after the minutes and rising expectations for a rate hike in March supported the US dollar’s rise during the session.

During the US session tomorrow, Friday, the markets are awaiting the data of the US labor market NFP, which will reflect the extent to which the US labor market is close to achieving the Fed’s target, and thus the market expectations of raising interest rates in March will rise even more. Today, Thursday, the focus will be on the employment index in the ISM services PMI, in addition to the weekly unemployment rate.

The general index of the US dollar rose with the opening of the European markets for today’s session by 0.17% and is trading at levels of $96.32.

The euro is trading below the 1.13 levels at 1.1289, down more than 25 points against the US dollar after strong gains recorded by the euro yesterday, Wednesday, coinciding with the statements of European Central Bank member Kazaks that it is possible for the bank to raise interest rates and reduce the stimulus program if the need arises.

The Canadian dollar, in turn, is trading at 1.2794 levels, its lowest in the week against the US dollar, with fears that the Canadian labor market data issued on Friday will be below expectations, especially after the imposition of a curfew in Quebec and the imposition of some restrictions in Canada in December.