Forex - Dollar edges lower ahead of release of Fed minutes
Investing.com - The dollar traded lower against most major
currencies on Tuesday ahead of the release of the minutes from the
Federal Reserve's October policy meeting, which investors doubted
would contain hints as to when the U.S. central bank will announce
plans to scale back stimulus programs.
In U.S. trading on Tuesday, EUR/USD was up 0.23% at 1.3538.
Fed uncertainty weakened the dollar on Tuesday.
Federal Reserve Chair Ben Bernanke is due to speak in public later Tuesday, and markets took up positions betting that the nation's top economist won't signal the need for a timetable to begin tapering the Fed's USD85 billion in monthly bond purchases, which keep the greenback weak to spur recovery.
Last week, Fed Chair Nominee Janet Yellen suggested the economy still needs the U.S. central bank's ultra-loose monetary policies to ensure recovery, and on Monday, the Fed's Bank of New York chief William C. Dudley said he was hopeful that recovery will gain steam soon but made no indication over a need to consider scaling back bond purchases.
Investors also bet that the minutes of the Fed's October meeting due for release on Wednesday will paint a similar picture for the need to hold off on scaling back stimulus tools for now.
Meanwhile across the Atlantic, European Central Bank board member Joerg Asmussen warned that monetary authorities must be "very careful" when considering the use of negative interest rates to steer the economy away from low inflation rates, which supported the single currency.
Elsewhere, data released on Tuesday showed that the ZEW index of German economic sentiment rose to a four-year high in November.
The ZEW index of German economic sentiment rose to 54.6 this month from October's 52.8 reading, beating market forecasts for the index improve to 54.0.
Elsewhere, Organization for Economic Co-operation and Development said earlier that the global economy will grow by 2.7% this year and 3.6% in 2014, down from forecasts of 3.1% and 4% in May, warning that the outlook for emerging markets is deteriorating.
The greenback was down against the pound, with GBP/USD up 0.09% at 1.6124.
The dollar was up against the yen, with USD/JPY up 0.20% at 100.19, and down against the Swiss franc, with USD/CHF down 0.20% at 0.9110.
The dollar was mixed against its cousins in Canada, Australia and New Zealand, with USD/CAD up 0.42% at 1.0473, AUD/USD up 0.51% at 0.9424 and NZD/USD trading up 0.26% at 0.8356.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.10% at 80.71.
On Wednesday, the U.S. is to release data on retail sales, consumer inflation, existing home sales and business inventories.
Markets will keep a close eye on the release of the Federal Reserve minutes of its latest policy meeting.
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