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Dollar Points Weaker In Asia After Fed Minutes

2017-10-12 10:26:51Trading Strategies
Dollar Points Weaker In Asia After Fed Minutes

 The dollar pointed weaker in early Asia on Thursday as minutes from the Fed showed some uncertainty still about a December rate hike.

USD/JPY changed hands at 112.49, down 0.01%, while AUD/USD traded at 0.7789, up 0.01%. EUR/USD traded at .1860, up 0.02%.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was last quoted down 0.32% to 92.79.

Federal Reserve policymakers had a prolonged debate about the prospects of a pickup in inflation and slowing the path of future interest rate rises if it did not, according to the minutes of the U.S. central bank's last policy meeting on Sept. 19-20 released on Wednesday.

The readout of the meeting, at which the Fed announced it would begin this month to reduce its large bond portfolio mostly amassed following the financial crisis and unanimously voted to hold rates steady, also showed that officials remained mostly sanguine about the economic impact of recent hurricanes.

"Many participants expressed concern that the low inflation readings this year might reflect... the influence of developments that could prove more persistent, and it was noted that some patience in removing policy accommodation while assessing trends in inflation was warranted," the Fed said in the minutes.

As such several said that they would focus on incoming inflation data over the next few months when deciding on future interest rate moves.

Nevertheless, many policymakers still felt that another rate increase this year "was likely to be warranted," the Fed said.

Japan reports PPI figures for September with a 0.2% gain seen on month.

Overnight, the dollar fell against a basket of major currencies on Wednesday after data showed weakness in the labor market.

The U.S. Labor Department's latest Job Openings and Labor Turnover Survey (JOLTs) report, a measure of labor demand, showed job openings in August fell to 6.082m, falling short of expectations of 6.125m.

The September 19-20 meeting saw the U.S. central kept rates unchanged and announced that it would begin to unwind its massive portfolio of bonds in October.

According to Investing.com’s fed rate monitor tool nearly 90% of traders expect the Fed to hikes rate in December compared to just 80% in the previous week.


Despite expectations of a December rate hike, the dollar has struggled to maintain upside momentum and is set for its fourth-straight daily loss. Some analysts noted a potential year-end rate hike could stifle inflation, limited gains in the dollar.

Also adding to dollar weakness was an uptick in the euro after Catalonia leader Carles Puigdemont put declaration of independence on hold to continue talks with Spain