Investing.com – U.S. dollar trading was serene on Wednesday ahead of the release of the Federal Reserve’s latest meeting minutes, while sterling gained less than expected as inflation fell less than expected in April.

At 04:55 ET (08:55 GMT), the dollar index, which tracks the greenback against a basket of six other currencies, was trading slightly higher at 104,600.

Dollar seeks direction ahead of Fed minutes

The dollar is trying not to show any significant movements as investors await the release of the Fed’s latest meeting announcements, looking for further clues on the likely path of US interest rates at the end of the year.

Last week’s weaker-than-expected consumer inflation data raised hopes of interest rate cuts within a reasonably tiny period of time, but several Fed officials continued to urge policy caution.

The Fed governor said Tuesday that the latest economic data shows the Fed’s contractionary policy is working as recommended, while the Atlanta Fed chairman said the central bank must exercise caution before cutting interest rates for the first time to quell spending and trigger a “rebound.” inflation. “

“We should get a bit more clarity on the FOMC’s thinking in the May meeting minutes,” ING analysts said in a note. “While there should have been evidence of growing concern about disinflationary hiccups, Powell’s message seemed to indicate broad optimism about future price developments.”

The pound gains in value after UK inflation data

In Europe, it rose 0.2% to 1.2733 after UK inflation fell less than expected in April, making a cut next month less likely.

The Office for National Statistics said it grew by 2.3% annually, down sharply from 3.2% in March and the lowest level since July 2021, when it was 2.0%. However, still above the 2.1% forecast.

“While this does not significantly change the BoE’s trajectory, it may prompt it to delay rate cuts for another month. Our basic scenario remains the first interest rate cut in August,” ING said.

fell 0.1% to 1.0849 as investors expect the interest rate cut cycle to begin next month.

“European Central Bank President Christine Lagarde sounded cautiously dovish, in line with most of the comments made by members of the Governing Council in yesterday’s speech,” ING said, adding that markets were pricing in next month’s monetary easing by 24 basis points.

“We still believe EUR/USD could return to 1.08 in the near future, but our Q3 forecast remains at 1.10 as the Fed shifts to easing and the ECB largely aligns with market expectations for rate cuts interest rates,” added ING.

Kiwi gains on hawkish RBNZ

In Asia, it rose 0.5% to 0.6118, with the New Zealand dollar rising sharply after the official interest rate was held steady, in line with broad expectations, but also seeing delays in any potential rate cuts due to persistent inflation.

fell 0.2% to 156.43 after tender trade data from Japan – which was disappointing and also higher than expected – weighed on the yen.

trading marginally higher at 7.2394, it remained within sight of a six-month high as investors awaited further signals on stimulus measures from Beijing and the Chinese economy.