After gaining in strength early on in the U.S. session on Wednesday ahead of the release of the minutes of the Federal Reserve’s June meeting, the U.S. dollar retreated and pared some gains against a few major currencies.
The dollar came off the day’s highs after the Fed’s minutes suggested the central bank will not be in a hurry to begin scaling back its asset purchase program.
The Fed has repeatedly said it plans to continue to its asset purchases at a rate of at least $120 billion per month until “substantial further progress” has been made toward its goals of maximum employment and price stability.
The minutes of the June meeting reiterated Fed Chair Jerome Powell’s view that “substantial further progress” has not yet been met, although participants expected progress to continue.
The Fed said participants agreed to continue assessing the economy’s progress toward the central banks goals at coming meetings and to begin to discuss their plans for adjusting the path and composition of asset purchases.
“In addition, participants reiterated their intention to provide notice well in advance of an announcement to reduce the pace of purchases,” the Fed said.
The dollar index, which rose to 92.85 by mid morning, later dropped to 92.43 before recovering to 92.71, gaining 0.17% over Tuesday’s close.
Against the Euro, the dollar firmed to $1.1794 from $1.1823. The European Commission has raised the growth forecast for the euro area, saying the Eurozone is set to grow 4.8% this year. That is stronger than the spring projection of 4.3%. The outlook for next year was raised to 4.5% from 4.3%.
The Pound Sterling was flat against the dollar, fetching $1.3797 a unit. The dollar had earlier recovered to $1.3755 a pound, after having slid to $1.3842 in the European session.
The Yen was little changed at 110.63 a dollar after moving in a very narrow range. Data from the Cabinet Office showed that the leading index, which measures the future economic activity in the country, fell to 102.6 in May from 103.8 in April. In March, reading was 102.4.
Against the Aussie, the dollar strengthened a bit to 0.7481 from 0.7497. The services sector in Australia continued to expand in June, albeit at a slower pace, the latest survey from the Australian Industry Group revealed on Wednesday with a Performance of Services Index score of 57.8.
The Swiss franc weakened to 0.9257 from 0.9242 a dollar. Data released by Swiss National Bank showed Switzerland’s foreign exchange reserves increased to 941124.80 CHF Million in June from 902518.80 CHF Million in May of 2021.
The Loonie eased to 1.2488 a dollar from 1.2461, after crude oil prices pared early gains and fell sharply for a second straight day.
According to a report released by Richard Ivey School of Business, the Ivey Purchasing Managers Index in Canada jumped to 71.9 in June from 64.7 in the previous month, recording the second highest reading since March 2011.