The US dollar slipped against some of its major peers today, including the euro and the Great Britain pound, and trimmed its gains versus the Japanese yen. The greenback was weakened by the Federal Reserve meeting minutes, which suggested that investors should not take economic recovery for granted.
The Fed released minutes of its June meeting today. The minutes revealed that US policy makers are concerned that financial market participants became too complacent and think that recovery and subsequent monetary tightening are guaranteed. Meeting participants agreed that they should downplay excessive optimism among investors:
They agreed that the Committee should continue to carefully monitor financial conditions and to emphasize in its communications the dependence of its policy decisions on the evolution of the economic outlook; it was also pointed out that, where appropriate, supervisory measures should be applied to address excessive risk-taking and associated financial imbalances.
Recalling the previous dovish comments, it looks like Fed members are keen on hammering in their point — economic growth is not certain, and monetary tightening will not necessary happen soon. It was disappointing for dollar bulls, who were hoping for an imminent interest rate hike, making them favor the US currency less.
EUR/USD jumped from 1.3612 to 1.3641 as of 20:59 GMT today. GBP/USD advanced from 1.7130 to 1.7157 following the drop to 1.7094. USD/JPY ticked up from 101.57 to 101.64 but retreated from the daily high of 101.85.
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