Important events today:

15:00 UTC – US: consumer sentiment index from the University of Michigan.

15:30 UTC – US: crude oil inventory data from the Department of Energy.

The minutes of the latest US Federal Reserve meeting showed no clear signs of interest rate cuts in the States in the coming months. The US regulator has indicated that it intends to keep interest rates on hold for an extended period of time until inflation returns to a sustainable downward trajectory towards 2.5%. The Fed is targeting core inflation, which excludes food and energy prices, and this is currently at 4%.

Apparently the Fed wants to wait for core inflation to fall into the 3.5% area, after which it may announce an interest rate cut. Since core inflation is falling at an average of 0.1% per month, we may see the 3.5% mark in March next year. Continued high interest rates by the US Fed is favourable for the dollar in the short term and negative in the long term, as the US currency will be hit by a wave of sell-offs as rates fall next year.

Recommendations: Sell 1.2535/1.2565 and TP 1.2461.