Dollar Rebounds Slightly ahead Of Fed Minutes

تم نشره في Wed 17 August / Aug 2016. 12:00 AM
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NEW YORK — The US dollar recovered slightly on Wednesday as traders took profits on Tuesday's gains in the euro, yen and Swiss franc, and on expectations that the Federal Reserve could strike a hawkish tone in meeting minutes to be released later in the session.


The dollar index, which measures the greenback against a basket of six major currencies, was last up 0.14 per cent at 94.923 after falling as low as 94.426 Tuesday,  marking its lowest level since June 24, or the day after Britain voted to exit the European Union, which unleashed turbulence in global markets.


The US dollar rebounded from more than seven-week lows against those three currencies, while expectations that the Fed could elaborate on a comment made in the central bank's July meeting statement that near-term risks to the US economic outlook had diminished also helped the dollar.


Analysts said such an elaboration could be perceived as a hint that a Fed rate increase this year is still possible. Federal funds futures on Wednesday implied traders saw a greater than 50 per cent chance of a rate hike by the end of the year, according to CME Group's FedWatch program.


The Fed is set to release the minutes at 2:00 p.m. ET (1800 GMT).


"The risk is that if the minutes were to have an air of optimism or a sense of hawkishness, that could boost the chance of a rate hike this year and brighten prospects for the dollar," said Joe Manimbo, senior market analyst at Western Union Business Solutions.


The dollar's gains were muted, however, as traders focused on San Francisco Fed President John Williams' dovish comments on Monday, rather than New York Fed and Atlanta Fed President Dennis Lockhart's signals on Tuesday of a potential rate hike before the end of the year.


The euro was last down 0.08 per cent against the dollar at USD1.1267, not far from its high touched Tuesday of USD1.1322 EUR. The dollar was up 0.17 per cent against the Japanese yen at 100.46 yen, after hitting a low Tuesday of 99.53 yen.