Dollar Dips as Markets Await Fed Signals on Rate Hikes

The US dollar remained weaker on Wednesday as financial markets awaited the release of Federal Reserve minutes and speeches from its policymakers for clues about potential rate hikes. The euro had surged the most in seven weeks in the prior session after French bond yields dropped following the frontrunner in next spring’s presidential election pledging to cut spending. Despite a dovish comment from a Bank of Japan board member, the yen weakened against the dollar.

The Fed is set to release minutes from its September 15-16 policy meeting, where it raised interest rates to combat inflation. Recent data, including lower-than-expected personal consumption expenditures (PCE) and jobs figures, has led to a less hawkish tone from Fed officials. The dollar index rose slightly to 101.94, following a prior session decline. The euro and yen saw minor adjustments, while bond yields globally have climbed due to rate hike expectations and government finance concerns.

Expectations for a Fed rate hike in October have dropped to 20.5% from about 51% a week ago, but markets still anticipate a hike in December. Fed officials are scheduled to speak later on Wednesday, with consumer credit data also set for release. In cryptocurrencies, bitcoin and ether saw slight declines.