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Forex- U.S. Dollar Falls Ahead of Fed Minutes

The dollar was lower on Wednesday. - The U.S. dollar slumped to a day low against a basket of other currencies on Wednesday as investors looked ahead to the Fed meeting minutes.

The Federal Reserve is expected to release its minutes from its latest policy meeting at 2:00 PM ET (18:00 GMT). Investors will be watching closely for clues of the number of future interest rate hikes.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell 0.29% to 89.06 as of 10:54 AM ET (14:54 GMT).

The dollar fell sharply following a mixed inflation report for March, which showed a yearly increase in inflation but a negative increase for the month.

The U.S. consumer price index fell 0.1% in March the Labor Department reported Wednesday, in what was the first and biggest drop in ten months. However annual inflation rose by 2.4% while underlying inflation rose 2.1% year-on-year.

Geopolitical tensions between the U.S. and Russia also weighed on the dollar. U.S. President Donald Trump said he would respond this week to a suspected chemical weapons attack in Syria. On Twitter, Trump told Russia to “Get ready… because they (missiles) will be coming…”

The dollar fell against the safe haven yen, with USD/JPY falling 0.44% to trade at 106.72. In times of uncertainty, investors tend to invest in the Japanese yen, which is considered a safe asset during periods of risk aversion.

The euro pushed higher, with EUR/USD increasing 0.30% to 1.2391. Meanwhile GBP/USD was up 0.28% to 1.4214.

Elsewhere, the Australian dollar was slightly higher, with AUD/USD rising 0.12% to 0.7770, while NZD/USD jumped 0.22% to 0.7372.

In Canada, the loonie rose, with USD/CAD falling 0.43% to 1.2544.

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