Dollar Higher After Fed Minutes Reveal Uncertainty Over Rate Path
The U.S. dollar edged higher Wednesday after minutes from the Federal Reserve's latest meeting showed policy makers debating whether tax cuts could require them to increase the pace of interest rate increases.
The Wall Street Journal Dollar Index rose 0.2% to 85.83, snapping a seven-session streak of declines. Higher interest rates tend to boost the dollar by making the currency more attractive to yield-seeking investors.
The dollar extended early gains after the minutes showed officials in December discussed the chances that inflation could build in the wake of new tax cuts, requiring the central bank to raise rates more aggressively in 2018 than last year. Fed officials have penciled in three rate increases in 2018 and two in 2019.
Investors have been watching for a pickup in inflation, which has remained tepid despite signs of expansion in the economy and labor market.
The euro fell 0.4% against the dollar to $1.2014, ending a five-session streak of gains.
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(END) Dow Jones Newswires
January 03, 2018 19:27 ET (00:27 GMT)