Dollar Recovers After Initial Fed Minutes Jolt

The dollar rebounded from overnight lows and steadied, as the market digested the minutes of the Federal Reserve's last policy meeting, which held the possibility of a March rate hike in play. The minutes of the Fed's Jan. 31-Feb. 1 meeting noted several policy makers saying that it was appropriate to hike interest rates again “fairly soon”, given that the jobs and inflation data come in line with expectations.

Dollar bulls were disappointed as they were hoping for a more hawkish tone from Fed Chair Janet Yellen. The greenback also weakened as policymakers brought up the downside economic consequences of a firmer dollar. The dollar index versus a basket of six major currencies climbed from overnight losses and was 0.15 percent higher at 101.380. The greenback dropped to a low of 112.905 yen overnight in an automatic response to the Fed minutes meeting but eventually pulled back to 113,420 for a gain of 0.1 percent.

The euro edged down 0.1 percent at $1.0548, as it retreated from a 1-½ month low of $1.094 the previous day. Sterling was flat at $1.2450 after slipping the day earlier as latest data showed that the UK business investment declined during the fourth quarter of 2016.

News are provided by InstaForex