Dollar Stabilizes with Modest Gain After Fed Minutes

The U.S. Dollar stabilized on Wednesday against most major peers, with last month’s Federal Reserve meeting minutes showing caution among monetary policymakers regarding tapering after a surge in inflation that exceeded expectations.

The Dollar Index (DXY), which measures the greenback against a basket of six peers, rose by 0.18% to 92.71.

The index moved throughout the day in a range between 92.425 and 92.845, mostly in the positive territory during the American session, after closing yesterday at 92.546.

Meanwhile, the benchmark 10-year Treasury bond yield declined by about 4.6 basis points to 1.323%.

Similarly, the return on the 30-year bond decreased by about 4 basis points to 1.942%, from 1.9810% a day earlier.

The USD registered marginal losses against the Japanese Yen (JPY) and the British Pound (GBP), with 0.003% and 0.02%, respectively, but fell by 0.26% against the Euro (EUR) after the upbeat growth expectations by the European Central Bank (ECB) for the Eurozone.

Members of the Federal Open Market Committee (FOMC) mostly expect tapering of the Fed’s asset purchases in the first quarter of 2022, and the first interest rate hike in the third quarter of 2023.