WASHINGTON (dpa-AFX) - After staying firm during the Asian session and extending its gains in the European session, the U.S. dollar tumbled Wednesday post release of the minutes from the Federal Reserve's July meeting.
The Fed minutes revealed most officials at the central bank's July monetary policy meeting believe it will be appropriate to begin tapering asset purchases this year.
However, the minutes showed there was still some disagreement over the timing of tapering the asset purchases. While some believe tapering could begin in the 'coming months,' others felt a reduction in the pace of asset purchases would be more likely to become appropriate next year.
Participants favoring waiting until next year saw prevailing conditions in the labor market as not being close to meeting the 'substantial further progress' standard or because of uncertainty about the degree of progress toward the price stability goal.
The Fed has repeatedly pledged to maintain its asset purchases at current levels until 'substantial further progress' has been made toward both its maximum employment and price stability goals.
The minutes showed participants also expressed a range of views on the appropriate pace of tapering asset purchases once economic conditions satisfied the 'substantial further progress' criterion.
The dollar index, which dropped to 92.96, did recover subsequently, but at 93.15, is up just marginally from the previous close now.
Against the Euro, the dollar was down slightly at $1.1710, having recovered from $1.1744. Eurostat's final reading of the Eurozone CPI inflation for July came in at 2.2% on an annual basis, meeting the flash estimate. On a monthly basis, the bloc's CPI figure for July came in at -0.1%, matching expectations.
The Pound Sterling is fetching $1.3755 a unit, compared with $1.3740 Tuesday evening. U.K. consumer price inflation slowed sharply in July to the Bank of England's target, preliminary data from the Office for National Statistics showed.
The consumer price index rose 2% year-on-year following a 2.5% increase in June. Economists had forecast a 2.3% inflation. Headline inflation slowed for the first time in five months.
The Yen weakened to 109.77 a dollar from 109.59. Japan posted a merchandise trade surplus of 441 billion yen in July, the Ministry of Finance said. That exceeded expectations for a surplus of 202.3 billion yen following the upwardly revised 384 billion yen surplus in June (originally 383.2 billion yen).
Against the Aussie, the dollar firmed to 0.7235 from 0.7253, gaining about 0.25%.
The Swiss franc is weaker against the dollar, having slipped to 0.9165 from 0.9150.
The Loonie has weakened to 1.2654 a dollar from 1.2633. Data from Statistics Canada showed the annual inflation rate in Canada accelerated to 3.7% in July from 3.1% in June. Economists had expected inflation to come in at 3.4%. Excluding gasoline, the CPI increased 2.8%. On a monthly basis, the CPI rose 0.6% in July, the fastest pace since January 2021.
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