Dollar gains after Fed minutes

NEW YORK CITY: The dollar pushed higher on Wednesday after the Federal Reserve's minutes of its last policy meeting indicated the central bank was committed to scaling back its asset-buying program.

The euro bought $1.3358 around 2200 GMT, down from $1.3420 late Tuesday.

The dollar edged up to 97.67 yen from 97.32 yen, while the euro fell to 130.46 yen from 130.60 yen.

The minutes of the Fed's policy-setting Federal Open Market Committee meeting in late July, released Wednesday afternoon, shed little light on the timing of the eventual tapering of the stimulus, which is dependent on broad improvement in the economy.

The minutes revealed divisions over the strength of growth, particularly with a persistently weak labor market.

But analysts generally predicted the tapering could begin in the coming months, even as soon as the FOMC's September 17-18 meeting.

"The minutes simply confirmed what American investors already think, which is that the Fed appears ready to reduce its asset purchases in September," said Charles St-Arnaud of Nomura.

David Song, currency analyst at DailyFX, predicted the dollar would continue to draw strength from the Fed's strategy to reel back economic stimulus.

"The Federal Open Market Committee minutes propped up the US dollar as the central bank showed broad support for the tapering timeline that was outlined by Chairman Ben Bernanke, and the rebound in the reserve currency should turn into a more meaningful rally as the board softens its dovish tone for monetary policy," Song said.

"The dollar looks poised to trade higher ahead of the September 17-18 meeting as the central bank shows a greater willingness to move away from its easing cycle," he said.

The dollar briefly dropped against the euro after the minutes were released then bounced back, a sign the markets had baked in the Fed strategy, said Kathy Lien of BK Asset Management.

"The reaction in the financial markets, particularly in currencies, has been slow and the reason is because investors have had plenty of time to position for tapering and the recent jump in bond yields suggests that the move has been priced in," she said.

The dollar advanced against the Swiss currency, to 0.9222 franc from 0.9174 franc late Tuesday.

The British pound slipped to $1.5660 from $1.5668.