US dollar dips vs euro as Fed minutes point to December rate hike

[NEW YORK] The US dollar dipped against the euro on Wednesday after the minutes of the Federal Reserve's October policy meeting reinforced expectations of an interest rate hike next month.

Most participants of the Federal Open Market Committee anticipated the US economy would be strong enough in December to weather the first rate hike in over nine years, the record of the October 27-28 meeting showed.

Some officials believed the economy was already strong enough at that time to justify a hike.

Data since the meeting has backed that: the October employment report showed the strongest surge in job growth all year, a gain of 271,000 payrolls, and the unemployment rate fell to 5.0 per cent, a fresh seven-year low.

Together, the minutes and data support solid market expectations of a rate liftoff next month.

"Unless the incoming data shows an unexpected deterioration in the economy, the Fed is likely to finally pull the trigger in December," IHS Global Insight economists in a research note The dollar eased back from a seven-month high against the euro.

The shared currency rose to US$1.0660 around 2200 GMT from US$1.0644 at the same time Tuesday.

"Having rallied to successive highs recently, the dollar appears at a juncture to take profit," said Joe Manimbo of Western Union Business Solutions.

AFP