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Dollar Down as Investors Await Fed Minutes By

Dollar Edges Higher; Volatility Limited Ahead of Inflation Data

© Reuters.

By Gina Lee – The dollar was down on Wednesday morning in Asia ahead of the U.S. Federal Reserve’s release of the minutes from its latest meeting. The euro, meanwhile, fell to an almost three-month low against the greenback as disappointed and raised concerns about the country’s economic recovery from COVID-19.

The that tracks the greenback against a basket of other currencies inched down 0.01% to 92.532 by 11:41 PM ET (3:41 AM GMT).

The pair held steady at 110.61.

The pair inched down 0.07% to 0.7491 while the pair inched up 0.06% to 0.7015.

The pair inched down 0.06% to 6.4714 and the pair inched down 0.01% to 1.3798.

The euro traded at $1.1820, after hitting a three-month low of $1.1806 during the previous session. It also fell against the yen to 130.81 yen, close to a two-month low of 130.05 hit on Jun. 21.

Data released on Tuesday said that the fell sharply to 63.3, below the 75.2 in forecasts prepared by and June’s 79.8 figure.

Separate data also said that contracted 3.7% month-on-month in May, against the 1% growth in forecasts prepared by and April’s 1.2% growth.

Meanwhile, the ongoing production dispute among the members of the Organization of the Petroleum Exporting Countries and allies (OPEC+) that caused a plunge in prices dampened sentiment for other risk-sensitive currencies.

The Australian dollar also gave up its gains from Tuesday as investors digested the handed down that day. In its first step towards asset tapering, the RBA announced a smaller, third round of its quantitative easing program and retained the April 2024 bond for its three-year yield target of 0.1%. The interest rate remained unchanged at 0.1%.

In the U.S., yields recently took a tumble after investors who had bet that the Fed would tighten its monetary policy sooner than expected thanks to rising inflation were forced to bail out of their positions.

The , to be released later in the day, are widely expected to offer clues to the central’s bank’s policy outlook moving forward.

However, some investors said that the clues are already there.

“Many people seem to think the Fed will drop hints on tapering in August, and will say in September that it is considered, and it will be implemented in December. But I believe the Fed could move earlier than those timelines,” Sumitomo Mitsui (NYSE:) Bank chief strategist Daisuke Uno told Reuters.

“The important point is, the Fed did already raise their inflation forecast,” Uno added.

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