The U.S. Dollar gained during the Asian trading session after the release of the most recent minutes from the Federal Reserve’s latest policy meeting in January. According to the minutes, some Fed members were concerned over the risks inherent in the current ultra loose monetary policy which includes unlimited asset purchases and believe that the U.S. central bank might need to tighten up before any improvement in the U.S. unemployment situation can be seen. If the Fed follows through and votes to restrict asset purchases, the U.S. Dollar is likely to gain against its major rivals and especially the Japanese Yen, which should continue to depreciate given the Bank of Japan’s stance.
As reported at 2:17 p.m. (JST) in Tokyo, the USD/JPY pair was trading higher at 93.58 Yen, improving on the 8% gain already made this year alone. The Euro was also feeling the pressure, with the EUR/USD pair trading at a session low at $1.3258, straying farther from yesterday’s session peak of $1.3434. The U.S. Dollar Index, which gauges the greenback’s value relative to a weighted basket of major currencies, gained 0.8% yesterday to trade at a high of 81.128 .DXY, the largest single day’s gains in several months.