U.S. Dollar Rises But Still Under Pressure After Fed Minutes
The greenback was slightly higher on Thursday after dovish minutes from the Federal Reserve on Wednesday caused a steep decline in the dollar.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, rose 0.15% to 94.94 as of 5:00 AM ET (10:00 GMT).
Minutes from the Fed’s December meeting showed that many policymakers are in favor of rates staying steady this year, increasing expectations that there will be no hikes in 2019. The dovish tone drove the dollar down to an almost three month low of 94.63.
“Basically the dollar has run out of things to make it go higher," said Erik Nelson, currency strategist at Wells Fargo (NYSE:WFC).
"The Fed has told us that they're probably at or near a point where they're going to pause interest rate hikes and we forecast the boost we saw to U.S. growth last year is definitely going to fade,” he added.
Meanwhile, investors are also looking ahead to comments from Fed Chairman Jerome Powell, who is speaking at 12:45 PM ET (17:45 GMT) at the Economic Club of Washington.
The euro was down due to the higher dollar, with EUR/USD down 0.15% to 1.1523. Sterling was also strained, as Brexit woes continue to dampen investor sentiment. GBP/USD slipped 0.19% to 1.2761.
Elsewhere, the Canadian dollar fell after jumping to a high of 1.3247 on Wednesday as the Bank of Canada kept rates steady. USD/CAD rose 0.18% to 1.3231.
The Australian dollar increased, with AUD/USD rising 0.17% to 0.7182 and NZD/USD flat at 0.6785.