Dollar holds losses as markets await Fed minutes, speakers

Later on Wednesday, the US central bank is due to release ​minutes of its September 15-16 policy meeting when it raised interest rates to contend with inflation. Comments from Fed policymakers have come across ​as less hawkish following lower-than-expected personal consumption expenditures (PCE) data and jobs data last week.

"There seems to be a little bit ⁠less urgency on the Fed to hike rates after the softer PCE and then the nonfarm payroll reports recently," Gavin Friend, a senior markets strategist ​at National Australia Bank, said on a podcast.

The dollar index, which measures the greenback against a basket of currencies, rose 0.03% to 101.94, following a 0.27% slide ​in the prior session. The euro eased 0.08% to $1.1249. The Japanese yen weakened 0.19% against the greenback to 158.43 per dollar.

Sterling dipped 0.08% to $1.3262. Bond yields around the world have climbed in recent weeks due to expectations of central bank rate hikes as well as concerns about government finances. French debt is under growing pressure as politicians struggle to curb the budget deficit ​ahead of a divisive election in 2027.

The calling of a snap election in Spain added to the recent stress on the euro. The euro rallied sharply ​on Tuesday after far-right French presidential candidate Marine Le Pen raised her target for spending cuts to €140 billion ($158 billion) from €125 billion in savings originally planned if she wins power in ‌2027.

The Bank ⁠of Japan's new policymaker Ayano Sato said in an interview with the Kyodo news agency on Wednesday that she supports the idea of raising interest rates in several stages.

The BOJ may signal this month that underlying inflation has roughly hit its 2% target, three people familiar with its thinking said, highlighting its readiness to raise interest rates again. OCTOBER FED HIKE EXPECTATIONS RETREATExpectations for a Fed rate hike later this month have retreated but markets are still anticipating more increases later in ​the year and next year.

In contrast ​to the recent call for patience ⁠from some Fed officials, Kansas City Fed President Jeff Schmid said on Tuesday that the central bank still needs to raise its policy rate further to lower inflation, even if higher long-term yields are weighing on activity in some parts ​of the economy.

The chance of a hike of at least 25 basis points in October stands at 20.5%, from ​about 51% a week ⁠ago,, opens new tab, but markets are pricing in an 84.5% chance of a hike at the December meeting.

"With little forward guidance from Chair (Kevin) Warsh, markets have reacted sharply to each US data release and policymaker speech," Commonwealth Bank of Australia currency strategist Samara Hammoud said in a report. "We expect the Fed to wait until ⁠December before ​hiking again.

"Fed officials Christopher Waller, Neel Kashkari and Alberto Musalem are all due to speak later ​on Wednesday. The central bank is also scheduled to release consumer credit data, which is expected to show a decrease to $15 billion in August from $18.06 billion in July.

The Australian dollar weakened 0.04% ​versus the greenback to $0.6979, while the kiwi slid 0.07% to $0.5617. In cryptocurrencies, bitcoin fell 0.22% to $85,438.59, and ether declined 0.12% to $2,695.22.