The U.S. dollar saw modest gains Wednesday as investors looked ahead to the release of the Federal Reserve’s latest policy meeting minutes and the Jackson Hole symposium for guidance on the central bank’s next steps.
By 04:55 ET (08:55 GMT), the Dollar Index—which tracks the greenback against a basket of six major currencies—was trading 0.1% higher at 98.190, following a combined 0.4% rise in the first two sessions of the week.
Eyes on Fed Minutes
With little development in the Ukraine conflict over the past 24 hours, market focus has shifted to the Fed’s minutes, expected later in the day. The Fed has kept its policy rate at 4.25%-4.50% this year, while some officials—including Chair Jerome Powell—have expressed concern that Trump-era tariffs could rekindle inflation pressures.
At the same time, the Fed has faced criticism from President Donald Trump, and a handful of officials have recently called for rate cuts. The minutes may reveal the extent of internal disagreements, after Governors Christopher Waller and Michelle Bowman dissented at the last meeting—the first dual dissent from voting officials since 1993.
“These minutes will air more of the views of the two dissenters (Waller and Bowman) who voted for a rate cut in July,” ING analysts said in a note. “Market moves, however, may be limited given that the July jobs report was released a few days later. A much better read on the Fed situation should emerge on Friday afternoon during Chair Powell’s speech at Jackson Hole.”
The Jackson Hole conference begins with informal discussions before the formal agenda is released Thursday evening. Powell’s Friday address will focus on the economic outlook. “In all, we don’t see the need for big DXY moves today and struggle to see it breaking above 98.50/60 resistance,” ING added.
Sterling Gains After UK CPI Data
In Europe, EUR/USD drifted 0.1% lower to 1.1638, with eurozone inflation data expected later in the session. Analysts forecast the annual CPI remained at 2.0% in July, in line with the ECB’s medium-term goal.
“EUR/USD should continue to trade in narrow ranges and we do not see the need for it to break under 1.1590/1600 today,” ING noted.
GBP/USD rose 0.1% to 1.3497 after the UK reported that consumer prices climbed 3.8% in July from 3.6% in June, exceeding the 3.7% consensus estimate. This marked the highest headline inflation since January 2024. Analysts at Capital Economics said a November rate cut remains possible, but warned that stronger inflation expectations and wage growth could delay further easing until 2026.
Other Currency Movements
The Japanese yen slipped, with USD/JPY down 0.1% at 147.58, while USD/CNY eased slightly to 7.1787 after the People’s Bank of China held the one-year Loan Prime Rate at 3.0% and the five-year at 3.5%, as expected.
The Australian dollar fell 0.3% to 0.6434, while the New Zealand dollar declined 1.3% to 0.5818—the lowest since mid-April—after the Reserve Bank of New Zealand cut its official cash rate by 25 basis points to 3.00%, signaling that further easing could follow if inflation pressures continue to ease. The Monetary Policy Committee voted 4-2 for the cut, with two members favoring a larger 50-basis-point reduction.
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