Investing.com - The dollar traded higher against most major
currencies on Wednesday after the Federal Reserve revealed in its
July policy meeting minutes that rate hikes could come sooner
rather than later if the labor market continues to improve.
In U.S. trading on Wednesday, EUR/USD was down 0.44% at
The Federal Reserve voted at its July 29-30 meeting to leave
benchmark interest rate unchanged at 0.00-0.25% and added it would
cut its monthly bond-buying program to $25 billion from $35 billion
at its July 29-30 meeting.
The Fed said that the overall economy is improving, though
slackness remains in the labor market despite growth, which
prompted monetary authorities to continue tapering its
asset-purchasing program by only $10 billion per policy
The Fed's stimulus bond-buying program is seen concluding around
October, and rate hikes are expected in 2015, though the timing of
the latter remains up in the air.
The minutes from that meeting released earlier revealed that
while some monetary authorities favored studying more data before
deciding, others felt action should come sooner rather than
"Many participants noted that if convergence toward the
Committee's objectives occurred more quickly than expected, it
might become appropriate to begin removing monetary policy
accommodation sooner than they currently anticipated," the minutes
released earlier Wednesday read.
"Indeed, some participants viewed the actual and expected
progress toward the Committee's goals as sufficient to call for a
relatively prompt move toward reducing policy accommodation to
avoid overshooting the Committee's unemployment and inflation
objectives over the medium term," the minutes added.
Fed Chair Janet Yellen has said that the U.S. economy is
improving though monetary authorities continue to note slackness in
the labor market, though the minutes revealed some monetary
authorities feel that slackness may be absorbed in the near
"Many members noted, however, that the characterization of labor
market underutilization might have to change before long,
particularly if progress in the labor market continued to be faster
The dollar was up against the yen, with USD/JPY up 0.79% at
103.73, and up against the Swiss franc, with USD/CHF up 0.45% at
The greenback was up against the pound, with GBP/USD down 0.11%
Sterling saw some support after the minutes of the Bank of
England's August meeting released earlier revealed that some U.K.
monetary authorities favored raising interest rates at its last
Ian McCafferty and Martin Weale voted to raise the bank rate by
25 basis points to 0.75%, while the remaining seven Monetary Policy
Committee (MPC) members voted to keep monetary policy
It was the first time that the MPC has been split over interest
rates since 2011.
The minutes revived expectations that the BoE could hike rates
in the coming months as the economic recovery in the U.K. continues
The dollar was up against its cousins in Canada, Australia and
New Zealand, with USD/CAD up 0.27% at 1.0971, AUD/USD down 0.19% at
0.9284 and NZD/USD down 0.61% at 0.8367.
The US Dollar Index, which tracks the performance of the
greenback versus a basket of six other major currencies, was up
0.48% at 82.33.
On Thursday, the U.S. is to produce data on unemployment claims,
manufacturing activity and existing home sales.
The first day of the annual economic symposium is due to take
place in Jackson Hole, Wyoming.
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