Investing.com – The dollar traded eased from highs against a basket of major currencies despite mostly positive economic data reported Wednesday ahead of the release of the Federal Reserve’s January meeting minutes.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose 0.12% to 89.75. The dollar eased from session highs of 89.91.
Sales of previously owned homes in the US unexpectedly fell in January, as tight supply continued to weigh on housing activity. The Commerce Department showed existing home sales fell 3.2% in January from the previous month to a seasonally adjusted annual rate of 538 million units. Economists were expecting a 0.9% rise to 5.61 million homes.
The sour note on existing homes sales came on the heels of Fed jawboning as Minneapolis Fed president Neel Kashkari suggested the central bank should continue on its current path, and avoid overreacting to one-month upbeat wage and inflation data.
Federal Reserve Bank of Dallas President Robert Kaplan reiterated that the Fed should gradually raise rates in 2018. Kaplan said he expects that inflation will make progress toward 2% over 2018 and the impact of tax-cuts will be seen in 2018.
The duo of speeches come ahead of the minutes of the Federal Reserve’s January meeting due at 2 p.m. ET. Market participants were said to have mixed views on how much weight should be given to the minutes as it was Janet Yellen’s final meeting as Fed chair.
Stifel chief economist, Lindsey M. Piegza said the Fed in its January policy statement noted a “specific forecast for a “move up” in inflation” in 2018, “warranting a “further” removal of accommodation.” Piegza said that the minutes may “provide additional context” on the Fed’s expectations on inflation and “likely policy response” should inflation fail to “move up.”