Dollar consolidates as Fed urges patience; markets await meeting minutes
dollar was steady against a handful of peers on Wednesday, as the market assessed calls for patience from Federal Reserve officials and awaited the publication of Fed minutes for more insight on the central bank's path.
Meanwhile, the kiwi inched up as traders awaited the Reserve Bank of New Zealand's monetary policy decision.
With little to drive the market in terms of economic data this week, major currencies continued to move in a tight range.
Investors have been shoring up rate cut bets after a milder inflation reading last week boosted expectations for U.S. rate cuts this year.
Following a slew of Fed officials striking a cautious note, markets had about 43 basis points (bps) of easing priced in versus last week's high of 52 bps.
Fed Governor Christopher Waller said overnight that he would need to see several more months of good inflation data before he would be comfortable supporting an easing in the stance of monetary policy.
That timeline was echoed by Cleveland Fed President Loretta Mester.
Still, Waller's comments gave the market little new to go on, said Kyle Rodda, senior financial market analyst at Capital.com.
«He basically told us that if inflation comes down, the Fed will cut… One implies the other and doesn't say anything about whether inflation and rates will come down.»
While markets remain hopeful that U.S. inflation will continue to slow down, PCE data due on May 31 will be a crucial test for confirming those expectations, he added.
The dollar index was firm at 104.61 against a basket
