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Dollar Steady Ahead Of Trade Talks

The U.S. Dollar stayed firm against most major currencies on Wednesday amid renewed optimism about the upcoming high-level trade talks between the U.S. and China.

However, prospects for more interest rate cuts by the Federal Reserve limited the greenback's uptick.

The dollar index rose to 99.16, after having stayed a bit sluggish earlier in the day. It was seen quoting at 99.12 around late afternoon.

The euro was up 0.13% with a unit fetching $1.0973, as against $1.0957 on Tuesday.

The dollar was gaining against pound sterling, quoting at 1.2203 a sterling, compared to 1.2218 on Tuesday.

Against the yen, the dollar rose to a one-week high of 107.62. It pared some gains subsequently and was around 107.50 yen, still up nearly 0.4% from previous close.

The dollar gained 0.1% and 0.3% against the loonie and Swiss franc, trading at 1.3337 and 0.9959, respectively. Against the Aussie, it was down marginally with the pair trading at 0.6725.

According to the minutes of the Federal Reserve's policy meeting in September, a few participants expressed concerns that the markets expect more interest rate cuts than are appropriate.

The minutes said those participants felt it might become necessary for the Fed to seek a better alignment of market expectations regarding the path of rates with policymakers' own expectations.

"Several participants suggested that the Committee's postmeeting statement should provide more clarity about when the recalibration of the level of the policy rate in response to trade uncertainty would likely come to an end," the Fed said.

The Fed minutes noted that most participants believed that the 25 basis point rate cut announced after the September meeting was appropriate, although there was notable dissent.

Members preferring the modest rate cut argued the move would insure against further downside risks arising from weak global growth and trade policy uncertainty, with a couple noting that monetary policy actions affect aggregate spending with a lag.

St. Louis Fed President James Bullard preferred cutting rates by 50 basis points, suggesting that a larger rate cut would be more consistent with the Fed's objectives over time.

Bullard felt a steeper rate cut would be particularly helpful in precluding the possibility of a protracted period in which inflation and employment were below the Fed's objectives.

In trade news, a report from Bloomberg News said China is still open to reaching a partial trade deal with the U.S.

An official with direct knowledge of the talks told Bloomberg that negotiators aren't optimistic about securing a broad agreement to end the U.S.-China war but said China would accept a limited deal as long as President Donald Trump does not impose any more tariffs.

In return, the official told Bloomberg, Beijing would offer non-core concessions like purchases of agricultural products without giving in on major sticking points.

A report released by the Commerce Department on Wednesday showed a modest increase in U.S. wholesale inventories in the month of August.

The report said wholesale inventories edged up by 0.2% in August, matching the uptick in July. Economists had expected inventories to increase by 0.4%.

The report said inventories of durable goods rose by 0.3%, while inventories of non-durable goods crept up by 0.1%.

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