Dollar Drops After Fed Minutes, Rebounds

The US dollar was mixed today after the release of the Federal Reserve minutes. The currency sank after the event even though the notes were rather hawkish. Yet the greenback bounced back almost immediately after the initial decline.
The Fed minutes signaled that a December interest rate hike is still very probable:

Some participants thought that the conditions for beginning the policy normalization process had already been met. Most participants anticipated that, based on their assessment of the current economic situation and their outlook for economic activity, the labor market, and inflation, these conditions could well be met by the time of the next meeting.

Yet it is important to remember that ultimately the decision will be data dependent and some policy makers were not convinced that economic indicators would improve by the next meeting:

Nonetheless, they emphasized that the actual decision would depend on the implications for the medium-term economic outlook of the data received over the upcoming intermeeting period. Some others, however, judged it unlikely that the information available by the December meeting would warrant raising the target range for the federal funds rate at that meeting.

Yet on the whole, the minutes were very hawkish, and therefore it is strange to see that the dollar did not react favorably to the release. Of course, it takes time for the market to digest the message sent by the US central bank, and it is possible that the market reaction will be clearer tomorrow.
EUR/USD was up a little from 1.0642 to 1.0650 as of 20:51 GMT today after reaching 1.0617 intraday — the lowest rate since April 15. USD/JPY ticked up from 123.41 to 123.53, and its daily high of 123.75 was the strongest rate since August 20. GBP/USD advanced from 1.5210 to 1.5233.

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