TOKYO- The dollar bounced off three-month lows against European currencies on Thursday after minutes from the Federal Reserve’s last policy meeting revealed there was more talk of tapering its bond purchases than investors had expected.
In the Fed minutes, several policymakers said that a discussion about reducing the pace of asset purchases would be appropriate “at some point” if the US economic recovery continues to gain momentum.
That surprised investors, given Fed Chair Jerome Powell had said right after that meeting last month that it is not time yet to begin discussing any change in policy.
“The minutes contained wordings that appear to seek to start discussion on tapering at an earlier timing than expected,” said TakafumiYamawaki, head of fixed income research at JPMorgan.
“If the next jobs data due on June 3 is strong, markets will start bracing for the Fed making a specific mention on tapering at its next meeting in June.”
The euro changed hands at $1.2174, flat on day after having slipped 0.4 percent in the previous session and off a three-month high of $1.2245.
The British pound slipped to $1.4104, down 0.1 percent so far on Thursday and slipping further from above $1.42 earlier this week while the Swiss franc eased to 0.90415 per dollar from Tuesday’s 0.89605, its highest in nearly three months.
The dollar rose to 109.15 yen from a one-week low of 108.575 yen touched on Wednesday. – Reuters
