Forex - Dollar Rebounds Ahead of Fed Meeting Minutes

© Reuters. Dollar rebounds ahead of Fed meeting minutes

Investing.com - The dollar rebounded on Wednesday, snapping three weeks of losses as investors looked ahead to the minutes of the Federal Reserve’s December meeting later in the day.

The , which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.19% to 91.73 by 08:34 AM ET (13:35 GMT), pulling away from Tuesday’s three month lows of 91.47.

The index ended 2017 down 9.8%, the biggest annual percentage decline since 2003.

The dollar weakened in 2017 as the global economy gained momentum fueling expectations for tighter monetary policy in other countries, which would lessen the divergence between the Fed and other central banks.

Market watchers were looking ahead to the minutes of the Fed’s December meeting, where its raised interest rates. Two policymakers voted against the rate hike amid doubts inflation would accelerate as hoped.

Investors were also looking ahead to Friday’s U.S. job figures for December.

The euro eased after a rally spurred by expectations that the European Central Bank will start to wind down its stimulus program later this year, with losing 0.27% to trade at 1.2026.

The single currency hit a four-month high of 1.2080 on Tuesday, putting it within striking distance of a September peak of 1.2092, its strongest level since early 2015.

The euro was boosted after data showing that the euro area manufacturing sector expanded at a record pace in December bolstered expectations that the ECB will start to scale back its asset purchase program later this year.

The dollar was little changed against the yen, with last at 112.23, pulling up from Tuesday’s two-week lows of 112.04.

Sterling slid lower against the greenback, with down 0.22% to 1.3557, retreating from three month highs of 1.3612 reached overnight.

Sentiment on the pound softened after data showing that growth in the slowed in December after forecasts for an unchanged reading.

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