Dollar firms against euro after Fed minutes
Dollar edged up against euro after the Fed Reserve released minutes from its last policy meeting.
NEW YORK (AFP) - The dollar edged up against the euro Wednesday after the minutes of the Federal Reserve's January meeting revealed some policy makers were pushing to raise interest rates.
The euro ticked lower, buying $1.3734 around 2300 GMT, down from $1.3756 late Tuesday.
Both the dollar and the euro dipped against the Japanese currency. The dollar fetched 102.31 yen, down from 102.34 yen.
The common European currency fell to 140.51 yen from 140.82.
The minutes of the Federal Open Market Committee meeting of January 28-29 showed the central bank's policy makers were generally upbeat about the US economy, shrugging off fresh turmoil in emerging markets and judging that poor December employment numbers were mainly weather-related.
The FOMC agreed for the second time in two months to proceed with cutting its massive bond-buying program, which it has used to hold interest rates low to stimulate investment and jobs growth.
The policymakers cut the monthly stimulus by $10 billion to $65 billion and pledged further "measured" reductions at future meetings, as long as economic conditions remained satisfactory.
"A few" members saw it appropriate to raise the Fed's key interest rate "relatively soon", the minutes said, amid rising market expectations of faster economic growth and rising rates even as inflation remains very low.
The policy makers also discussed changing their forward guidance on the Fed's first interest rate hike but the minutes showed no consensus on how that would be done. The Fed has an unemployment rate threshold of 6.5 percent, a hair away from January's 6.6 percent jobless rate.
The FOMC minutes "contained very little surprises," said Kathy Lien of BK Asset Management.
"There's a very good chance the Fed will follow in the Bank of England's footsteps and drop their unemployment rate threshold next month" at the March 18-19 FOMC meeting, she said.
Michael Gapen of Barclays said that although the minutes are "somewhat stale" because the meeting occurred before the weak January employment report and softening incoming data, "FOMC communications continue to suggest the bar for altering the taper path remains high."
"Consequently, the outlook for $10 billion reductions in bond purchases at each of the remaining Fed meetings this year remains largely intact. As such, these minutes should prove at least somewhat supportive for the US dollar."
The dollar was unchanged against the pound, which bought $1.6680.
The greenback rose to 0.8886 Swiss franc from 0.8880 the prior day.
