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22/05/24
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USD Flat Before Fed Minutes
On Wednesday, the U.S. dollar was calm before the release of the minutes from the previous Federal Reserve meeting.
The U.S. dollar index, which measures its strength against 6 other major currencies, traded slightly higher at 104.600.
The dollar is battling to move in any meaningful way as traders wait for the release of the minutes from the previous Fed meeting, which they hope will provide more clues on the likely path of U.S. interest rates moving to the end of this year.
The soft-than-expected consumer inflation data last week fueled hopes of rate cuts in a relatively short time, but several Fed officials have continued to urge caution about policy.
On Tuesday, Fed Governor Christopher Waller said economic data recently showed that the Fed’s restrictive policy was working as expected, while Raphael Bostic, the Atlanta Fed Chair noted that the central bank had to be cautious before its first rate cut led to pent-up spending and caused inflation to bounce.
Analysts at ING said in a note there should be more clarity on the FOMC thinking in the minutes for the May meeting. Although there may be evidence of increased worries around the disinflation obstacles, Powell’s messaging appeared to indicate a broader optimism about future price developments.
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