Dollar Gains Against Rivals As Traders Digest Fed Minutes

The U.S. dollar climbed higher in the European session on Wednesday, and stayed firm with most of its gains intact till the release of the minutes from the Federal Reserve's latest policy meeting.

Despite easing a bit post release of the minutes, the currency still remained stronger against most of its major counterparts.

The minutes showed the central bank intends to move "expeditiously" to a more neutral monetary policy stance.

The minutes revealed the Fed plans to use both interest rate increases and reductions in the size of its balance sheet to achieve a neutral posture.

At the meeting, the Fed decided to raise the target range for the federal funds rate by 50 basis points to 0.75 to 1%, marking the biggest rate hike since May 2000, and also decided to begin reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities on June 1.

The minutes of the meeting showed most participants agreed additional 50 basis point increases would likely be appropriate at the "next couple of meetings."

Data released by the Commerce Department showed new orders for durable goods increased by less than expected in the month of April.

The Commerce Department said durable goods orders rose by 0.4% in April after climbing by a downwardly revised 0.6% in March. Economists had expected durable goods orders to advance by 0.6% compared to the 1.1% jump that had been reported for the previous month.

The dollar index, which surged to 102.45 in early New York session, was hovering around 102.15 a little while ago, netting a gain of nearly 0.3%.

Against the Euro, the dollar firmed to $1.0676 from $1.0736.

The dollar is trading at $1.2576 against Pound Sterling, gaining from $1.2533.

Against the Japanese currency, the dollar has strengthened, fetching 127.32 yen a unit, compared with 126.83 yen on Tuesday.

The dollar is stronger against the Aussie at 0.7088. The Swiss franc is weaker at 0.9623 a dollar, easing from 0.9606. The Loonie is little changed at C$1.2821 against the dollar.

For comments and feedback contact: editorial@rttnews.com

Forex News

Follow RTT