Dollar rebounds

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    SINGAPORE- The dollar clung to overnight gains yesterday, after minutes from last month’s US Federal Reserve meeting gave few clues about whether an even more dovish shift in its policy framework is possible in the autumn, disappointing some dollar bears.

    A heavily shorted greenback put on its biggest one-day surge since March after the release, hitting 93.159 against a basket of currencies =USD, about 1 percent above Tuesday’s two-year trough. The move wiped out earlier gains made by other majors.

    Speculation has been rife the Fed will adopt an average inflation target, and seek to push inflation above 2 percent to make up for years it has run below, as part of a broader policy review.

    But the minutes were vague on the issue and merely said “a number” of Fed members thought it would be helpful to make a revised statement on its policy strategy at some point, without providing details or timing.

    After hitting an 18-month high of $0.7275 before the meeting, the Australian dollar tumbled back below 72 cents and last sat at $0.7186. The New Zealand dollar dropped almost 1.4 percent from its intraday high to sit at $0.6561.

    The euro – the most stretched of all recent gainers on the greenback – fell 0.7 percent overnight to trade back below $1.19. It last sat at $1.1841. The pound was dumped back to $1.3103 and the dollar jumped 0.7 percent on the yen to 106.13. – Reuters