Dollar rises as September Fed tapering still seen as likely
The dollar gained across the board on Wednesday after minutes of the Federal Reserve's meeting in July suggested the U.S. central bank was still on track to taper its asset-buying next month. The minutes showed divided opinions on the committee, but the overall view was that the minutes did not change the market's expectation of a September tapering.
The euro hit a session low against the dollar at $1.3334 after the release of the Fed minutes and was last quoted at $1.3347, down 0.5 percent. On Tuesday, it reached $1.3452, the highest since Feb. 14.
Against the yen, the dollar rose to a session high at 97.98 and last changed hands at 97.78, up 0.5 percent. The yen earlier fell after Bank of Japan Governor Haruhiko Kuroda said he will not hesitate to provide further monetary stimulus if downside risks to the economy increased. Analysts at Morgan Stanley said they maintain their bullish dollar/yen outlook and "consider pullbacks as providing buying opportunities."
Growth-linked commodity currencies also extended their losses as global equity markets came under pressure. The Australian dollar was down 1.1 percent at US$0.8974. The New Zealand dollar slid 1.6 percent to US$0.7846.
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