U.S. Dollar Falls Ahead Of U.S. FOMC Minutes

(RTTNews) - The U.S. dollar weakened against other major currencies in the European session on Wednesday, as traders await the release of the minutes of July's Federal Reserve (Fed) monetary policy meeting, due later on the day.

In the midst of a divided committee, the central bank-maintained interest rates on hold and did not provide investors with any forward direction during that meeting.

Due to Chairman Kevin Warsh's continued commitment to the Fed's "no forward guidance" policy, it is anticipated that the FOMC minutes will have no effect on interest rate expectations. Citing upside inflation risks, the Fed opted during the meeting to maintain interest rates in the 3.50%-3.75% range.

The CME FedWatch tool indicates that the likelihood of the Fed maintaining interest rates in September is 67%.

Due to the significant degree of uncertainty surrounding the Middle East crisis and rising oil prices, which are preventing the US dollar from further declining, market volatility is still muted in Wednesday's European session, with a slight risk-off attitude predominating.

In the European trading today, the U.S. dollar fell to 2-day lows of 1.1606 against the euro, 1.3566 against the pound and 159.06 against the yen, from early highs of 1.1570, 1.3523 and 159.55, respectively. If the greenback extends its downtrend, it is likely to find support around 1.17 against the euro, 1.36 against the pound, 155.00 against the yen,

Against the Swiss franc and the Canadian dollar, the greenback dropped to 0.8102 and 1.3870 from early highs of 0.8129 and 1.3908, respectively. The greenback is likely to find support around 0.79 against the franc and 1.37 against the loonie.

Looking ahead, U.S. MBA mortgage approvals data, U.S. EIA crude oil data are slated for release in the New York session.

At 2:00 pm ET, U.S. Federal Reserve's FOMC minutes of its latest monetary policy meeting is scheduled to be released.