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Dollar In Comeback Mode As Fed Quells QE3 Chatter

Dollar In Comeback Mode As Fed Quells QE3 Chatter

The dollar edged higher versus European rivals on Wednesday, extending its gains from the previous session after the Federal Reserve signaled that fewer voting members were convinced of the need for more economic stimulus.

Only "a couple" dovish members were worried that additional stimulus could become necessary if the economy lost momentum or if deflationary pressures develop, according to the minutes of the central bank's most recent policy making meeting.

At the meeting last month, the Fed held interest rates at effectively zero and reiterated their conditional pledge to keep rates low through late 2014.

Most participants saw the U.S. economy expanding moderately despite the "temporary" effects of higher gasoline prices.

The dollar rose to $1.3140 versus the euro, up from a range near $1.3350. With the advance the dollar touched its highest since March 21.

The European Central Bank left its key interest rate unchanged at a record low 1 percent this morning.

Gains were more muted against the sterling, with the dollar improving to $1.5858 from a 4-month low near $1.6060.

On the other hand, the buck continued to wobble versus the yen, easing to Y82.30 from near Y83.

On the economic front, the ADP National Employment report, which sheds light on non-farm private employment, is scheduled to be released at 8:15 am ET. The consensus expectations are for an addition of 208,000 jobs by the sector in March following an addition of 170,000 jobs in February.

The Institute for Supply Management is scheduled to release the results of its non-manufacturing survey at 10 am ET. The non-manufacturing index is likely to show a reading of 57 for March, almost flat with the February reading of 57.3.

by RTT Staff Writer

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