The dollar stays below 2-week highs before Fed minutes; yen slides Reuters

Author: Saikat Chatterjee

LONDON (Reuters) – The dollar remained below two-week highs on Wednesday as traders waited for the minutes of the December meeting of the Federal Reserve to wait, as expectations of a rate hike in March kept the yen near a five-year low. .

The minutes, at 1900 GMT, highlight the new sensitivity of US policymakers and their willingness to act. Markets have stepped up their bid for a quarter-percent rate hike in March and put a full price on it in May.

“If the tapering had ended a few months ago, we believe the FOMC would have raised rates now above the Fed’s long-term unemployment rate and core and high inflation … well above,” Standard Chartered (OTC:) analysts said.

Against a basket of rivals, he stood at 96,269, after reaching a two-week high of 96,462 in the previous session.

Neel Kashkari, chairman of the Federal Reserve Bank of Minneapolis, said Tuesday that the U.S. central bank will have to raise interest rates twice to deal with high inflation this year, with rates expected to be at least zero by 2024.

Partial U.S. labor data on Wednesday and non-farm payrolls will also be seen on Friday as a guide to borrowing cost trajectory.

The Japanese yen weakened psychological support levels at around 115.50 on Tuesday compared to the green card, reaching a five-year low of 116.35. It was trading at 115.90 on Wednesday.

Risk-sensitive Australian and New Zealand dollars have struggled as Omicron has eased fears of preventing a global economic recovery. [AUD/]

Sterling, on the other hand, has risen about 2.7% in a dozen trading days against the dollar since December 20, while traders say the rise in UK Omicron cases will not stop the Bank of England from raising rates. [GBP/]