Dollar inches up after Fed minutes

Published: February 21, 2019 14:00:00 | Updated: February 21, 2019 16:17:57

The dollar inched up on Thursday after minutes from the Federal Reserve’s last meeting revived expectations for a possible US rate hike this year while the Aussie dollar skidded on policy easing expectations and a Chinese ban on Australian coal, according to Reuters.

The greenback had risen slightly against the yen and trimmed losses versus the euro late on Wednesday after the Fed, in the minutes of its latest meeting in January, said the US economy and its labour market remained strong, prompting some expectations of at least one more interest rate hike this year.

The dollar index against a basket of six major currencies added 0.17 per cent to 96.614, crawling away from a two-week trough of 96.286 marked on Wednesday.

The Fed caught markets off guard last month after it took a dovish turn in its commentary, widely read as a sign it would suspend a three-year campaign to raise interest rates.

“The dollar drew some lift as the minutes appeared to have appeased market participants who were clinging to views that the Fed would hike rates one more time this year - but all in all, the minutes were in line with what the Fed said in January,” said Daisuke Karakama, chief market economist at Mizuho Bank.

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