The dollar fell against the yen and euro during early Asian trade Thursday, amplifying overnight weakness following Federal Reserve minutes that signaled uncertainty over the policy direction of President-elect Donald Trump’s incoming administration.
The dollar tumbled 0.8% against the yen and 0.5% against the euro, with the sharpest moves occurring after the main start of bond and equity trading in Tokyo.
The WSJ Dollar Index, a measure of the U.S. dollar against a basket of major currencies, was down 0.25% at 92.72.
The U.S. currency came under pressure overnight after minutes from the Fed’s Dec. 13-14 meeting showed central bankers grappling with “considerable uncertainty” about the new U.S. administration’s possible impact on the economy.
Central bank debate on the potential impact of a Trump fiscal stimulus suggests Fed policy may be tighter than expected in 2017—a view that fits with a sustained rally in the dollar since Mr. Trump’s election victory. But the market appears to have focused on the “considerable uncertainty” comment, driving U.S. bond yields and the U.S. dollar lower overnight, said Rodrigo Catril, currency strategist at National Australia Bank.Read More...
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