Dollar Down as Fed Minutes Hint at Tapering Discussion By

Dollar Edges Lower; More Euro Gains Likely Despite Dovish ECB

© Reuters.

By Gina Lee – The dollar was down on Thursday morning in Asia as the U.S. Federal Reserve meeting minutes revealed that policymakers suggested a slowdown of bond purchase due to a sign of accelerating inflation.

The that tracks the greenback against a basket of other currencies inched down 0.08% to 90.123 by 11:53 PM ET (3:53 AM GMT).

The pair was down 0.07% to 109.14 as April’s trade data released earlier in the day exceeded expectations. grew 38.0% year-on-year, increased 12.8% year-on-year and the gained 225.3 billion.

The pair edged up 0.17% to 0.7740. Employment data for April released earlier in the day said that the decreased by 30,600 in April while the fell to 5.5%. Across the Tasman Sea, the pair edged up 0.13% to 0.7176.

The pair inched up 0.07% to 6.4385, with the People’s Bank of China releasing the loan prime rate earlier in the day.

The pair inched up 0.01% to 1.4114.

In the , released on Wednesday, several policymakers suggested that the start scaling back asset purchases “at some point” if the U.S. continues its economic recovery.

Investors were caught by surprise as Fed Chairman Jerome Powell and other Fed officials had reiterated that the Fed would stick to its current dovish policy as any rising inflation would be temporary.

“The minutes contained wording that appears to seek to start the discussion on tapering at an earlier timing than expected… if the next jobs data due on Jun. 3 is strong, markets will start bracing for the Fed making a specific mention on tapering at its next meeting in June,” Takafumi Yamawaki, head of fixed income research at JPMorgan (NYSE:), told Reuters.

Other investors agreed with Yamawaki.

“It is worth noting that the FOMC minutes predate the latest and /earnings numbers, so the fears of the minority on the FOMC are likely to have become a little more acute since the April meeting,” Tapas Strickland, RBA’s director of economics and markets, told Reuters.

On the cryptocurrency front, bitcoin slid 3% to $35,654 as China banned financial institutions and payment companies from providing services related to cryptocurrency transactions. Meanwhile, ether plunged over 10% to as low as $2,168.

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