Investing.com - The dollar firmed up against the other major currencies on Wednesday as investors looked ahead to the minutes of the Federal Reserve’s July meeting due for release later in the trading day.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, edged up to 94.85, holding above Tuesday’s seven-week lows of 94.38.
Investors were looking to the minutes of the Fed’s July meeting for possible indications on the future path of interest rates.
The U.S. central bank left rates unchanged at its meeting last month, but opened the door to rate hikes later this year and indicated that risks to the economy had diminished since June.
Comments by a Fed official on Tuesday supported the view that rates could still rise later this year.
New York Fed head William Dudley said a rate increase as early as September is “possible.”
The U.S. central bank raised interest rates for the first time in almost a decade in December.
Higher interest rates typically boost the dollar by making it more attractive to yield seeking investors.
The dollar had weakened across the board on Monday in the wake of a paper from San Francisco Fed head John Williams arguing that central banks might have to lift inflation targets and favor looser fiscal policy in future..
The euro was holding below seven-week highs, with EUR/USD steady at 1.1275.
The dollar moved higher against the yen, with USD/JPY rising 0.38% to 100.68.
The pound dipped against the dollar, with GBP/USD easing 0.15% to 1.3027.
