Dollar edges back from 18-month high after FOMC minutes
TLT•The dollar index was steady at 102.23 after rising 0.3% Wednesday, as hawkish Fed minutes signaled inflation was policymakers’ biggest risk. Futures priced a 19% probability of a quarter-point rate hike at the Fed’s next meeting, unchanged from a day earlier.
1. Dollar holds near high
The dollar held near its strongest level in a year-and-a-half in subdued Asian trading on Thursday after minutes from the Federal Open Market Committee signaled policymakers viewed inflation as the biggest risk to their outlook. The dollar index was steady at 102.23 after rising 0.3% on Wednesday, remaining within a few pips of its strongest level since April 9, 2025.
2. Rate outlook little changed
The Fed voted unanimously to raise rates by a quarter percentage point at its September 15-16 meeting, though the minutes indicated divisions over the rationale. Most participants viewed further tightening as appropriate, Westpac analysts wrote. The minutes did little to shift expectations that the Fed would refrain from raising rates at its meeting later in October; futures priced a 19% probability of a quarter-point hike, unchanged from a day earlier.
3. Currency moves mixed
The dollar fell 0.2% to 157.815 yen after Japan reported an August current account surplus of 4.062 trillion yen, above economists’ median forecast of 3.19 trillion yen. The Australian and New Zealand dollars, offshore yuan, euro and pound were little changed.
