Dollar near two-month highs after Fed minutes; yen remains weak

investing.com:

Investing.com — The U.S. dollar edged lower in early European trade Thursday but remains trading near two-month highs after the minutes from the last Federal Reserve meeting offered a hawkish slant.

At 03:00 ET (07:00 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.1% lower at 103.292, not far removed from the 2-month high of 103.59 seen overnight.

The dollar saw more demand overnight after the minutes from the July Federal Reserve policy meeting showed that a number of officials still saw the potential need for more interest rate hikes, offering support for the U.S. currency.

“Most participants continued to see significant upside risks to inflation, which could require further tightening of monetary policy,” according to minutes published Wednesday in Washington.

Additionally, the July Fed meeting came before a raft of U.S. data that underscored the resilient economy.

The latest example of this came from the real estate sector, as data on Wednesday showed that housing starts surged in July and permits for future construction rose.

Additionally, a separate report revealed industrial production climbed 1.0% last month, a sharp rebound from June’s 0.8% fall.

There’s more data to study later Thursday, with weekly initial jobless claims and the August Philadelphia Fed manufacturing index due.

USD/JPY edged lower to 146.31, with the yen now trading near its lowest level since November as the idea that the Fed could keep its interest rates at high levels for longer exacerbated the interest rate differentials between the U.S. and Japan's ultra-low rate environment.

Additionally, data showed that Japan logged a surprise trade deficit in July, while the country’s exports,