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Dollar mixed as June Federal Reserve rate hike seen as unlikely
[NEW YORK] The dollar rose against the euro and the yen on Wednesday, but fell against the pound after Federal Reserve monetary policy meeting minutes said a June interest rate hike was unlikely.
"Many participants" at the US central bank's April monetary policy meeting "thought it unlikely that the data available in June" would meet conditions required for a rate hike, the minutes of the April 28-29 meeting said.
Policy makers expressed concern about weak economic reports in the first quarter, although these data were generally viewed as due to "transitory" factors, such as severe winter weather and the West Coast port strike that ended in late February.
Matt Weller, an analyst at Forex.com, said the Federal Open Market Committee (FOMC) minutes suggested September would be the "absolute earliest" the Fed is would hike rates.
But Chris Low, chief economist at FTN Financial, said while the minutes showed almost no chance of a June rate hike, a liftoff will probably come sooner than some prognosticators think.
The Fed's view of the economic weakness as largely transitory suggests central bank staff "appears confident as ever in the prospects for a quick economic rebound," Low said.
"The FOMC is not likely to tighten in June, but their discussion will take the possibility seriously," Mr Low said. "We read the minutes as confirmation September is still very much in play."