FX.co ★ Dollar Steadies Ahead of FOMC Minutes

The dollar index stabilized around 99.6 on Wednesday after briefly touching its lowest level in more than two months earlier this week, as investors shifted their focus to the minutes of the Federal Reserve’s July meeting for fresh signals on the monetary policy outlook. The Fed left interest rates unchanged last month, though three officials dissented in favor of a hike, and traders are now looking for more insight into the policy split within the central bank.

Futures markets currently imply about a 65% probability that policymakers will hold rates steady in September, following a run of weaker-than-expected US economic data, while expectations for a rate increase later this year have largely receded.

Investors are also awaiting Chairman Kevin Warsh’s remarks at the Fed’s annual Jackson Hole symposium later this month, where he may attempt to calm markets amid a global bond selloff. The 30-year US Treasury yield rose to a 19-year high this week, and sovereign bond yields in other major economies likewise climbed to their highest levels in decades.