U.S. Dollar Pulls Back Ahead Of Fed Minutes

The dollar on Wednesday pulled back after recent gains, amid hopes minutes of the U.S. central bank’s last monetary policy meeting may provide clues about the potential for more easing measures.

The ICE dollar index DXY -0.14% , which tracks the greenback against a basket of six major currencies, reached 83.306 in Asian trading hours, down from 83.377 in late North American trading on Tuesday.

The Federal Open Market Committee is due to release the minutes of its last interest rate setting meeting later in the global trading day.

“There is a particularly wide divergence in views on the FOMC, and the minutes may give some flavor as to what would be necessary (especially on the employment front) to garner enough support for more easing,” said Sue Trinh, strategist at RBC Capital.

The dollar reached a two-year high against the euro EURUSD +0.24% Tuesday and the common currency softened again on Wednesday, trading at $1.2258, from $1.2261 in late North American trading hours.

“For now, the forex market simply cannot shake its fundamental negativity towards the single currency,” said Simon Smith, chief economist at FXPro.

The British pound GBPUSD +0.20%  was at $1.5524, up slightly from $1.5511 reached late in the previous session.

Against the yen USDJPY -0.23% , the dollar traded at 79.32 yen, from ¥79.44. The Bank of Japan started a two-day policy meeting on Wednesday.

“While there is nothing very positive to say about Japan, this has never been a major negative for the yen, and the continued weakening of global data will tend to continue to provide the yen with support,” said currency strategists at Lloyds Corporate Markets.

The Australian dollar AUDUSD +0.55%  advanced to $1.0217, from $1.0186

MarketWatch