The dollar inched higher against most major currencies on Wednesday, after losses in the previous sessions, as traders consolidated positions ahead of the release of minutes from the Federal Reserve's most recent policy meeting. The minutes from the US central bank's rate-setting Federal Open Market Committee (FOMC) are due at 2:00 pm EDT (1800 GMT) and investors will be looking for indications of how soon the Fed plans to raise interest rates.
The greenback rose versus the yen after dropping 1.6 percent over two days, the worst two-day loss in eight months. "We're seeing a little volatility as traders square up ahead of the Fed meeting minutes," said John Doyle, director of markets at Tempus Consulting in Washington.
In early New York trading, the dollar was up 0.1 percent against the yen at 108.13, after hitting a three-week low on Tuesday. The dollar was slightly up against the Swiss franc at 0.9576 franc, and was flat against a basket of major currencies at 85.67, having hit a four-year high of 86.765 last week. The euro was flat on the day against the dollar at $1.2667. The single currency has fallen almost 10 percent against the dollar over the past five months as the outlooks for growth and monetary policy in the euro zone and United States have become increasingly divergent. It earlier hit a one-month low against the yen at 136.50 yen in Asian trading on deepening worries about euro zone growth prospects and the looming threat of deflation.
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