Dollar rallies in late NY on FOMC minutes

The greenback regained traction in New York and rallied across the board on Wednesday as the Federal Reserve hinted that it would consider changing its monetary policy in order to stick to aggressive monetary policy for far longer than previously expected.  
  
Reuters reported Federal Reserve policymakers are considering tweaks to monetary policy that could result in the U.S. central bank sticking with aggressive stimulus measures far longer than under its previous rubric, minutes from their last policy meeting showed.    
The readout of the Fed's July 28-29 meeting, published on Wednesday, also showed policymakers concerned that a recovery from the economic downturn triggered by the coronavirus pandemic faced a highly uncertain path. For instance, they judged that the swift rebound in employment seen in May and June had likely slowed and that additional "substantial improvement" in the labor market would hinge on a "broad and sustained" reopening of business activity.    
The minutes also showed policymakers were nearing agreement on changes to the Fed's policy framework, including changes to its periodic Statement of Longer-run Goals and Monetary Policy Strategy.  
  
Versus the Japanese yen, although dollar continued its recent losing streak and fell to +a fresh 2-week low at 105.11+ at Asian open on usd's weakness, price staged a strong rebound to 105.60 on short-covering before retreating to 105.18 in Europe. However, the pair later rallied to +session highs at 106.14+ in New York afternoon after the release of Fed's FOMC minutes.  
  
Although the single currency gained to 1.1952 in Asian morning, price retreated to 1.1923 in European morning and despite recovering again to 1.1950, the pair later fell to session lows of 1.1831 in New York afternoon on renewed usd's strength after the release of FOMC minutes before staging a minor rebound.  
Reuters reported Eurostat confirmed its earlier estimate of a 0.4% rise of annual inflation in July, after a 0.3% increase in June.    Stripping away food and energy prices, a key measure watched by the European Central Bank, inflation rose in July by 1.3% from 1.1% in June, Eurostat said.   
  
While the British pound extended its recent ascent and gained to 1.3265 at Asian open, then to +a fresh 7-1/2 month high at 1.3266+ at European open after better-than-expected UK inflation data, cable erased intra-day gains and later fell to 1.3195 on cross-selling in sterling before rebounding to 1.3227 in New York on short-covering but only to tumble again to session lows at 1.3095 due to usd's strength.  
  
Reuters reported British consumer price inflation rose to 1.0% in July from 0.6% in June, the Office for National Statistics said. That was above all forecasts in a Reuters poll of economists that had pointed to an unchanged rate of 0.6%.     Core inflation - which excludes typically volatile energy, food, alcohol and tobacco prices - also rose to 1.8% from June's 1.4%. Economists had expected the rate to fall slightly to 1.3%.   

In other news, Reuters reported no new high-level trade talks have been scheduled between the United States and China but the two sides remain in touch about implementing a Phase 1 deal, White House Chief of Staff Mark Meadows told reporters aboard Air Force One on Tuesday.     U.S. President Donald Trump earlier told reporters during a visit to Yuma, Arizona, that he had postponed an Aug. 15 review of the trade agreement signed with China in January given his frustration over Beijing's handling of the coronavirus pandemic.   
  
Data to be released on Thursday :  
  
Germany producer prices, Swiss trade balance, industrial production, exports, imports, EU construction output, U.S. initial jobless claims, continued jobless claims, Philadelphia Fed manufacturing survey, leading index change, and Canada ADP employment change.