The U.S. dollar stumbled against a basket of currencies on Thursday, even as the Federal Reserve’s minutes indicated that a December rate rise is on the cards — albeit at a gradual pace.
Most markets anticipated that the economic conditions in the U.S warranted a rate hike by December, but the Federal Open Market Committee’s comments hinting at a slower rate of growth for the U.S. economy has caused some dollar bulls to take profits, according to analysts.
“The Fed is trying to change the emphasis from when they raise rates, to the pace at which they do so. They re-iterated the gradual pace of future rate moves, and this has led to some profit-taking in the dollar,” senior currency strategist at Rabobank, Jane Foley told CNBC.
The dollar index fell as much as 0.5 percent to 99.166 against both a group of major currencies and the euro, to trade around $1.07.
The Japanese yen gained 0.5 percent against the greenback after the Bank of Japan kept policy unchanged.
Deutsche Bank adjusted its expectations of the timing of the first U.S. rate rise in nearly a decade, with economists from the bank stating they had joined the December “liftoff camp” after the Fed released minutes from its October meeting on Wednesday.
Investors have recently built up long positions in the dollar, or bets on further strengthening for the currency, Foley said, but some closing of these positions following the Fed’s caution about the pace at which it raises rates weighed on the greenback.
via CNBC 
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