Dollar Sneaks Lower ahead of Fed Minutes

On Wednesday, the U.S. greenback glided lower compared to major currencies, in advance of the January 31 to February 1 Fed Reserve Open Committee (FOMC) minutes of meetings, scheduled to be released at 14:00 ET.

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On Wednesday, the U.S. greenback glided lower compared to major currencies, in advance of the January 31 to February 1 Fed Reserve Open  Committee (FOMC) minutes of meetings, scheduled to be released at 14:00 ET.

The U.S. dollar index, which gauges  the greenback’s strong point against a trade-weighted basket of six major currencies, was steady at 101.38, off the prior session’s one-week peak of 101.72, 02:21AM ET

In spite of a stronger U.S. existing home sales print for January of 5.69 million compared to expectations of 5.51 million, the dollar index failed to add to gains in the early morning U.S. session, as market players anticipate the minutes of the Fed Reserve Open  Committee (FOMC) for direction.

“Several  expect a hawkish tone among policymakers, after several Fed members’, including Fed Chief Janet Yellen, indicated that the Fed should tighten interest rates sooner rather, should the U.S. economy continues  to show robust growth,”  according to the reports.

Against the backdrop of optimistic remarks from Fed members  regarding a March rate hike, Minneapolis Fed President Neel Kashkari stated on Tuesday, the U.S. labor market has “more room to run”, an indication that the  Fed may not hike in March.

Somewhere else, GBP/USD declined 0.21% to $1.244, after the U.K. Office for National Statistics stated that gross domestic product (GDP) extended by 2% year-on-year, compared to expectations for a 2.2% increased.

The euro improved from session lows to trade at $1.055 up 0.13%, after the single currency shrugged off concerns over France’s presidential election campaign while EUR/GBP gained 0.34% to trade at 0.8478.  USD/JPY traded lower at $113.46, down 0.18%.

In the meantime, the Russian USD/RUB plunged more than 1% against the greenback to trade at 57.97, after a report exposed that Russia’s unemployment rate marked up to 5.6% in January, up from 5.3% in December.

On Additional News

On Thursday, the Australian dollar inched lower against its U.S. counterpart, after the announcement of downbeat Australian data, although the New Zealand dollar inched higher after the minutes of the Fed Reserve’s latest policy meeting.  AUD/USD eased 0.09% to 0.7694, 02:21AM ET.

The Australian Bureau of Statistics earlier reported that private capital expenditure dropped 2.1% in the 4th quarter, compared to expectations for a 0.5% drop. Private capital expenditure dropped 3.3% in the 3rd quarter of 2016, whose figure was revised from a previously estimated 4.0% decline.

NZD/USD added 0.19% to trade at 0.7204, the highest since February 20.

Later on  Wednesday, the minutes of the Fed’s January policy meeting indicated that policymakers thought it may be suitable to increase  interest rates once more “fairly soon.”

However, the minutes also shown the central bank’s improbability over the lack of clarity of the Trump administration’s economic program, which limited the dollar’s gains.

The minutes came after Fed Chair Janet Yellen stated the previous  week that a rate increase would be right at one of the Fed’s upcoming meetings.

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