American Dollar advances as FOMC Minutes open door to future taper talks

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American Dollar advances as FOMC Minutes open door to future taper talks

On Wednesday, the American Dollar clawed back sharply after minutes from Fed’s most recent policy meet had revealed that a number of Fed policymakers were edging towards taper talk, handing out a much-required boost to the greenback and snapping out a four-day long losing streak.

In point of fact, April's FOMC minutes published late in the day had unveiled that a number of members of US Federal Reserve’s FOMC (Federal Open Market Committee) had said that a sustenance of recent growth in US economy “at some point” would require the Federal Reserve to tighten up its belts on monetary policy, eventually proffering a boost to the safe-haven asset having widely contemplated as a hedge against inflation alongside the US Treasury bond notes.

Meanwhile, referring to US Fed’s latest meet which had underpinned the likelihoods that a gradual withdrawal of fiscal support from the US Central Bank might be lurking over the horizon, a President of World Market at TIAA Bank in St.

Louis, Chris Gaffney said, “The big thing from the Fed minutes is the mention of beginning of taper talks. Any mention of the Fed stepping in and raising rates will have a major impact on the dollar”.

US Dollar rises robustly after FOMC minutes

Citing statistics, in the day’s late-afternoon US trading hours, the US Dollar Index (DXY) measured against a basket of six major currencies on an average, jumped as much as 0.52 per cent to 90.25, while euro tumbled 0.5 per cent to $1.2164.

Elsewhere, the British pound shed 0.58 per cent to $1.4106 against its American counterpart, and the greenback rose 0.64 per cent against its Canadian peer to $1.214, though was still chartering at its lowest since 2015.

Apart from that, the safe-haven Japanese Yen faltered 0.25 per cent against the greenback to 109.26 Yen per Dollar shortly after the release of FOMC minutes.