Dollar Rises Against Major Counterparts After Fed Minutes

(RTTNews) - The U.S. dollar firmed against its major counterparts on Wednesday after minutes of the Federal Reserve's most recent monetary policy meeting suggest officials expect to maintain interest rates at current levels longer than previously thought.

The minutes said participants highlighted disappointing readings on inflation over the first quarter and indicators pointing to strong economic momentum, and assessed that it would take longer than previously anticipated for them to gain "greater confidence" inflation is moving sustainably toward 2%.

With Fed officials repeatedly saying they need "greater confidence" inflation is slowing before they cut rates, the minutes said participants discussed maintaining the current restrictive policy stance for longer.

While officials also discussed reducing policy restraint in the event of an unexpected weakening in labor market conditions, various participants also mentioned a willingness to raise rates further should risks to inflation materialize in a way that such an action became appropriate.

Meanwhile, the participants reiterated the future path of interest rates would depend on incoming data, the evolving outlook, and the balance of risks.

While the likelihood rates will be lower by September remains high, the chances have fallen to 70.6% from close to 90% last week, according to CME Group's FedWatch Tool.

A report from the National Association of Realtors showed existing home sales in the U.S. unexpectedly saw further downside in the month of April, slumping by 1.9% to an annual rate of 4.14 million in April after tumbling by 3.7% to a revised rate of 4.22 million in March.

Economists had expected existing home sales to rise by 0.5% to an annual rate of 4.21 million from the 4.19 million originally reported for the previous month.

The dollar index climbed to 104.97, gaining nearly 0.3%.

Against the Euro, the dollar firmed to 1.0822, gaining from 1.0855. The dollar was down slightly against Pound Sterling at 1.2717. Against the Japanese currency, the dollar strengthened to 156.75 yen.

The dollar strengthened against the Aussie to 0.6621. Against Swiss franc, the greenback climbed to fetch CHF 0.9154 a unit, up nearly 0.5% from the previous close. The dollar firmed against the Loonie to C$ 1.3691 from C$ 1.3655, with weak crude oil prices adding to dollar's strength.