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Dollar pares gains with Fed minutes on tap

Published 08/17/2016, 10:50 AM
Updated 08/17/2016, 10:50 AM
© Reuters.

© Reuters.

Investing.com - The dollar pared gains against the other major currencies on Wednesday, as investors became more cautious ahead of the minutes of Federal Reserve’s most recent policy meeting due later in the day.

EUR/USD dipped 0.08% to 1.1271, off Tuesday’s seven-week high of 1.1324.

The dollar strengthened broadly after Atlanta Federal President President Dennis Lockhart said on Tuesday that two rate hikes in 2016 were a possibility.

The comments came shortly after New York Fed head William Dudley said that the U.S. central bank might raise rates as soon as its September policy meeting.

GBP/USD slid 0.25% to 1.3013, reapproaching Monday’s one-month trough of 1.2862.

Markets shrugged off a report by the U.K. Office for National Statistics saying that the claimant count fell by 8,600 in July, compared to expectations for a increase of 9,500 people, and following an advance of 900 a month earlier.

The unemployment rate remained at 4.9% in the three months to June, in line with forecasts.

Meanwhile, the average earnings index, including bonuses, rose by 2.4% in the three months to June, in line with forecasts and after increasing by 2.3% in the three months to May.

Excluding bonuses, wages rose by 2.3%, also in line with the consensus estimate and following a 2.2% increase in the three months to May.

USD/JPY rose 0.18% to 100.47, easing off the previous session’s one-and-a-half month low of 99.52, while USD/CHF added 0.29% to 0.9635.

The Australian and New Zealand dollars extended earlier losses, with AUD/USD down 0.94% at 0.7219 and with NZD/USD declining 0.92% to 0.7219.

Earlier Wednesday, Statistics New Zealand said that the number of employed people increased by 2.4% in the second quarter, exceeding expectations for a 0.6% gain.

The unemployment rate fell to 5.1% in the second quarter from 5.7% in the first quarter, compared to expectations for a slip to 5.3%.

In Australia, data showed that the wage price index edged up 0.5% in the second quarter, in line with expectations.

Year-on-year, wage prices rose 2.1% in the three months to June, beating expectations for a 2.0% gain.

Elsewhere, USD/CAD edged up 0.17% to 1.2883, boucing off Tuesday’s one-and-a-half month low of 1.2793.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.08% at 94.83, off earlier highs of 95.04 but still above the previous session’s seven-week low of 94.38.

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