The dollar rose against most major peers as Federal Reserve officials said they might reduce their $85 billion in monthly bond purchases “in coming months” as the economy improves, minutes of their last meeting show.
The euro dropped from a four-year high versus the yen as the European Central Bank is considering a negative deposit rate if more economic stimulus is needed, according to two people with knowledge of the debate. The yen strengthened as a panel said Japan’s government-run pension fund needs restructuring.
“The Fed came across less dovish,” Joe Manimbo, a market analyst in Washington at Western Union Business Solutions, a unit of Western Union Co., said in phone interview. “The market is caught in this tug of war on the time line for a taper, so less-dovish minutes give a little more leverage to the camp in the market that expects the Fed to taper policy by March or sooner. That has increased the tailwind we’ve seen on the dollar.”