US Dollar moves higher on Fed minutes

New York (Apr 8)  The U.S. Dollar rose against its rivals Wednesday after minutes from the Federal Reserve’s March meeting revealed several policy makers favored raising rates in June.

The euro EURUSD, -0.24% fell to $1.0777, its lowest level in five days, after the minutes were released at 2 p.m. Eastern. The single currency had traded at $1.0824 Tuesday.

The buck USDJPY, -0.20% traded at 120.17 yen, compared with ¥120.30 Tuesday.

Earlier in the global day, the dollar weakened against the yen after the Bank of Japan policy makers opted to leave its policy unchanged.

Analysts had expected the Fed minutes to be the highlight of a session that was devoid of important economic data.

The Fed shocked markets in March when policy makers said increases to the Fed funds rate, its benchmark interest rate, would begin later, and occur more gradually than the market had expected.

U.S. stocks initially tumbled after the release, but have since recovered. Treasury yields also returned to pre-release levels after jumping briefly. The S&P 500 SPX, +0.20%  was up 7.8 points, or 0.3%, at 2,084. The yield on the 10-year was up 0.9 basis points to 1.902%.

Traders are now looking ahead to first-quarter earnings from Alcoa Inc. AA, +1.71% which are expected after Wednesday’s closing bell. The aluminum giant’s earnings mark the unofficial start to an earnings-reporting season that is expected to be the weakest overall in at least 2 1/2 years.

Adam Cole, global FX strategist at RBC Capital Markets, said poor U.S. earnings could weigh on the dollar.

“Any suggestions that earnings were pressured by weaker export margins or volumes will be potentially [dollar] negative,” Cole said in a note to clients.

Source: MarketWatch