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U.S. Dollar Climbs Strongly after Fed Minutes

The dollar had the biggest gain in a month as minutes of the Federal Reserve’s last meeting showed most policy makers said the central bank was likely to reduce the pace of its $85 billion in monthly bond purchases this year.

The U.S. currency rose for a second day versus the yen as President Barack Obama nominated Janet Yellen to run the Fed, fueling bets it will maintain policies to spur economic growth. The minutes of the Federal Open Market Committee meeting, which took place before the Capital Hill deadlock over the budget and debt limit, showed a lengthy debate over economic progress. The pound slid as U.K. industrial production unexpectedly shrank.

“The FOMC minutes appear to have given a boost to the dollar as markets focus on the key headline that most FOMC members see tapering by the end of the year,” Vassili Serebriakov, a foreign-exchange strategist at BNP Paribas SA in New York, said in a phone interview. “Positions against the dollar have been vulnerable for a while and are starting to unwind.”

Bloomberg [1]

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