The dollar had been higher ahead of the central bank minutes

The U.S. dollar reversed course on Wednesday to turn slightly lower, as safe haven demand for the dollar from earlier in the day amid escalating tensions between Tehran and Washington was offset by central bank minutes that showed an evenly divided debate over monetary policy outlook.

At 20:55 GMT, the U.S. dollar index was down 0.1% to 100.99.

U.S. monetary policymakers noted high uncertainty with regard to the outlook on interest rates and discussed a range of scenarios from inflationary pressures dissipating to remaining elevated, the minutes of the central bank’s June meeting showed on Wednesday.

What stands out most in the minutes is the fairly DOVISH tone on the monetary policy outlook – the language on inflation at the present time was hawkish, and some officials felt there was a case for hiking rates last month, but looking forward, it sounds like people are thinking about easing rather than tightening, Vital Knowledge’s Adam Crisafulli said.

The dollar had been higher ahead of the central bank minutes, as investors flocked to its safe haven status following the biggest escalation of tensions between Tehran and Washington since the signing of their interim peace deal in mid-June.

Turning to other major currencies, the yen weakened against the dollar, with the USD/JPY pair jumping 0.4% to 162.62 and keeping the currency deep in potential intervention territory.

Elsewhere, the New Zealand dollar was up 0.4% to $0.5699. Earlier, the country’s reserve bank delivered a widely expected quarter-point rate hike and maintained that further policy tightening may be required to return inflation to target.

The Australian dollar was marginally higher at $0.6930.