SINGAPORE- The dollar edged higher on Thursday after minutes from the US Federal Reserve’s latest policy meeting firmed bets for a rate hike this month, while a broad risk-off mood in Asia lent some support to the Japanese yen.
Minutes of the Fed’s June meeting released on Wednesday showed that the vast majority of policymakers expect further tightening in US monetary policy, even as they agreed to hold interest rates steady last month.
That sent the dollar slightly higher alongside Treasury yields while stocks slumped,as expectations grew that the Fed will resume its rate-hike campaign this month and that rates would stay higher for longer in order to tame inflation.
The euro was last 0.09 percent lower at $1.0843, while sterling dipped slightly to $1.02702.
The US dollar index gained 0.02 percent to 103.36.
“The FOMC minutes seemed hawkish with some committee members favoring a rate hike, though none voted for one at the end,” said Alvin Tan, head of Asia FX strategy at RBC Capital Markets.
“It heightened the impression that the June pause was an interim one.”
Markets are now pricing in an 89 percent chance that the Fed will raise rates by 25 basis points at its policy meeting later this month, according to the CME FedWatch tool.
The yen, however, jumped more than 0.5 percent against the dollar to 143.86, as concerns about the global growth outlook, resulting from the aggressive monetary tightening cycles by major central banks, weighed on risk appetite.
The Japanese currency is traditionally considered as a safe haven asset.
