Dollar loses steam ahead of Fed meeting minutes, US inflation test

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Key Points

SINGAPORE (Reuters) The dollar dipped broadly on Wednesday, tracking a slide in U.S. Treasury yields weighed down by dovish Federal Reserve comments, as traders looked to the central banks policy meeting minutes out later in the day for clues on its interest rate outlook...

A slew of Fed officials have signalled in recent days that the U.S. central bank may not need to tighten monetary policy much further than initially thought.. Atlanta Fed Bank President Raphael Bostic said on Tuesday the central bank did not need to raise borrowing costs any further, and Minneapolis Fed President Neel Kashkari followed with similar remarks later in the day...

The comments pushed the greenback to a two-week trough against a basket of currencies in the previous session, with the dollar index languishing near that level in early Asia trade..

U.S. Treasury yields have similarly tracked lower following the dovish Fed comments, with the two-year yield, which typically reflects near-term rate expectations, hitting a one-month low of 4.9260% on Tuesday..

The Australian dollar rose to a roughly one-week high of $0.6440 while the New Zealand dollar scaled a two-month top of $0.6050, helped slightly by a report saying China is weighing new stimulus measures...

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