Dollar pared intra-day gains after less-hawkish FOMC minutes

Despite dollar's initial gain after release of retail sales, price then retreated after less-hawkish FOMC minutes and ended the day marginally higher against majority of its peers as July's meeting showed that the Fed could slow down its pace of rate hike in order to get inflation under control.  
  
Reuters reported U.S. retail sales were unchanged in July as declining gasoline prices weighed on receipts at service stations, but consumer spending appeared to holding up, which could further assuage fears that the economy was already in recession.    
The Commerce Department on Wednesday said that retail sales' flat reading last month followed a downwardly revised 0.8% increase in June. Retail sales in June were previously reported to have advanced 1.0%.    Economists polled by Reuters had forecast that sales would gain 0.1%, with estimates ranging from as low as a 0.3% decline to as high as a 0.9% increase. Retail sales are mostly goods and are not adjusted for inflation.  
  
Federal Reserve officials saw "little evidence" late last month that U.S. inflation pressures were easing, and steeled themselves to force the economy to slow down to control an ongoing surge in prices, according to the minutes of their July 26-27 policy meeting.    
While not explicitly hinting at a particular pace of coming rate increases, beginning with the Sept. 20-21 meeting, the minutes released on Wednesday showed U.S. central bank policymakers committed to raising rates as high as necessary to tame inflation - even as they began to acknowledge more explicitly the risk they might go too far and curb economic activity too much.    "Participants agreed that there was little evidence to date that inflation pressures were subsiding," the minutes said.  
  
Versus the Japanese yen, dollar found renewed buying at 133.92 in Asian morning and gained to 134.90 in European morning on cross-selling in jpy. The pair then ratcheted higher to a 2-week high at 135.49 in New York on upbeat U.S. retail sales before retreating to 134.80 after less-hawkish FOMC minutes.   
  
The single traded with a firm bias in Asia and gained to 1.0186 at European open before retreating sharply to 1.0150. Euro moved sideways then before falling to 1.0146 at New York open on usd's rebound after release of U.S. data. However, the pair then spiked up to 1.0198 in New York morning on cross-buying of euro especially vs sterling before ratcheting higher to session highs of 1.0202 after after less-hawkish Fed minutes.  
  
The British pound traded with a firm bias in Asia and briefly spiked up to session highs at 1.2143 after the release of UK CPI. The pair then erased its gains and tumbled to an intra-day low at 1.2028 in New York on usd's rebound together with cross-selling in sterling especially versus euro.  
  
More from Reuters, British consumer price inflation rose to 10.1% in July, its highest since February 1982, up from an annual rate of 9.4% in June, as the squeeze on households intensifies, official figures showed on Wednesday.    
The increase was above economists' expectations in a Reuters poll for inflation to rise to 9.8% in July, and will do nothing to ease the Bank of England's concerns that price pressures may become entrenched.    Earlier this month the BoE raised its key interest rate by 0.5% to 1.75% - its first half-point rise since 1995 - and it forecast inflation would peak at 13.3% in October, when regulated household energy prices are next due to rise.  
  
Data to be released on Thursday:  
  
Australia employment change, unemployment rate, Swiss exports, imports, trade balance, EU construction output, HICP, U.S. initial jobless claims, continuing jobless claims, Philly Fed manufacturing index, Canada producer prices, U.S. existing home sales and leading index change.