1 month ago
Forex

U.S. Dollar Little Changed Before Fed’s Policy Meeting Minutes

Investing.com - The U.S. dollar was little changed on Wednesday in Asia as traders await the minutes from the January

Investing.com - The U.S. dollar was little changed on Wednesday in Asia as traders await the minutes from the January U.S. Federal Reserve meeting due later in the day.

The central bank, at its Jan. 30 meeting, held rates steady and said it will be patient on further rate hikes.

“First, (the Fed) effectively ruled out any rate increases this year,” Investing.com’s Darrell Delamaide said. “Now the message coming across is that the Fed won’t be shrinking its balance sheet much more than it has already and will keep it at fairly elevated levels.”

“It may even keep quantitative easing -- purchasing bonds with money created out of thin air -- as a new tool for monetary policy rather than just an emergency measure.”

The U.S. dollar index last traded at 96.393 by 1:37 AM ET (06:37 GMT), up 0.05%.

Meanwhile, the USD/JPY pair was up 0.2% at 110.84. The Japanese currency received a lift on Tuesday after Bank of Japan governor Haruhiko Kuroda told the Japanese parliament that the central bank would consider additional easing if a stronger yen threatens to depress prices and activity.

"The BOJ does not really have a lot of options left even if it wanted to act. But the global trend -starting with the United States, Europe and Australia- is moving toward central bank dovishness and the BOJ's stance is in line with the trend," said Koji Fukaya, president of FPG Securities, in a Reuters report.

The USD/CNY pair lost 0.4% at 6.7258. The pair is likely to trade in ranges, Westpac analyst Frances Cheung said in a note that was cited by FXStreet.

“USD/CNY is likely to trade in ranges, with upside risk as we remain cautious towards the development of U.S.-China trade relations," Cheung said.

Another round of trade talks between China and the U.S. began this week in Washington, after the last meeting ended with no deal. Earlier this week, U.S. President Donald Trump said the talks with China are going “very well.”