Dollar lower ahead of Fed’s release of minutes

by Jonathan Adams
Dollar Index

The U.S. Dollar Index edged down 0.01% to 92.532

The dollar was lower on Wednesday morning in Asia ahead of the U.S. Federal Reserve’s release of the minutes from its latest meeting. The euro, meanwhile, dropped to a nearly three-month low against the greenback as German economic data disappointed and raised concerns about the country’s economic recovery from the pandemic.

The U.S. Dollar Index edged down 0.01% to 92.532 by 3:41 AM GMT.

The USD/JPY pair held steady at 110.61.

The AUD/USD pair dropped 0.07% to 0.7491 while the NZD/USD pair rose 0.06% to 0.7015.

The USD/CNY pair edged down 0.06% to 6.4714 and the GBP/USD pair edged down 0.01% to 1.3798.

The euro traded at $1.1820, after hitting a three-month low of $1.1806 during the previous session. It also declined against the yen to 130.81 yen, close to a two-month low of 130.05 hit on Jun. 21.

Data released on Tuesday said that the German Zentrum für Europäische Wirtschaftsforschung (ZEW) economic sentiment index declined sharply to 63.3.

Separate data also said that German factory orders contracted 3.7% month-on-month in May.

Meanwhile, the ongoing production dispute among the members of the Organization of the Petroleum Exporting Countries and allies which includes other key crude producing countries, referred to as the OPEC+ that caused a plunge in prices dampened sentiment for other risk-sensitive currencies.

The Australian dollar also gave up its gains from Tuesday as investors digested the Reserve Bank of Australia (RBA)’s policy decision handed down that day. In its first step towards asset tapering, the RBA announced a smaller, third round of its quantitative easing program and retained the April 2024 bond for its three-year yield target of 0.1%. The interest rate remained unchanged at 0.1%.

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