FOMC minutes: bearish for USD
The US dollar fell against most major currencies on Wednesday after the FOMC minutes from the March 19 meeting showed no signs of higher interest rates ahead. As a result, the USD index weakened to the pre-meeting levels.
After the meeting last month, Fed Chairwoman Janet Yellen said the central bank would consider raising interest rates 6-month after the end of QE. However, not all the Fed’s members share her optimistic views. Minutes showed Committee members discussed keeping interest rates low for a longer period of time even after employment and inflation reaches targeted levels. Fed’s inflation target lies at 2%, in February 2014 it came at 1.1%.
Deutsche Bank: "With the mention of inflation risks and no confirmation of the 6-month story from Yellen's comments, this tends to lean on the dovish side. And the dovish side is slightly negative for the dollar. Still, the Fed minutes' impact on the dollar is likely to be limited, because the US currency has already weakened considerably since Friday's jobs report.