Investing.com - The dollar trimmed gains against most major currencies on Wednesday though remained largely higher after the minutes from the Federal Reserve's latest policy meeting revealed monetary authorities are preparing to normalize policy though rate hikes aren't on any timetable.
In U.S. trading on Wednesday, EUR/USD was down 0.14% at 1.3682.
The Federal Reserve Board of Governors agreed at their April policy meeting that the time has come to discuss ways to wrap up monetary stimulus programs, though rate hikes aren't on the drawing board yet, as no inflationary risks have become evident due to ultra-loose policies.
The Fed is currently purchasing $45 billion in Treasury and mortgage debt a month to spur recovery, a monetary policy tool known as quantitative easing that suppresses long-term interest rates, weakening the dollar while boosting stock prices on hopes investing and hiring will follow suit.
The Fed's current asset-purchasing plan kicked off at $85 billion in 2012, though further tapering will be likely as the economy stands on its own two feet.
Monetary authorities agreed at their April meeting to seek out a mix of tools to normalize monetary policy, though the U.S. central bank didn't spell out exactly when benchmark interest-rate hikes would begin, which watered down the greenback's earlier gains.
"Participants generally agreed that starting to consider the options for normalization at this meeting was prudent, as it would help the Committee to make decisions about approaches to policy normalization and to communicate its plans to the public well before the first steps in normalizing policy become appropriate," the minutes from the Fed's April 29-30 meeting read.
"Early communication, in turn, would enhance the clarity and credibility of monetary policy and help promote the achievement of the Committee's statutory objectives."
The Fed also added that stimulus programs have not fueled inflationary pressures as of now, which gives monetary authorities flexibility to manage the economy that would spur job creation without escalating consumer prices.
"It was also noted that because inflation was expected to remain well below the Committee's 2 percent objective and the unemployment rate was still above participants' estimates of its longer-run normal level, the Committee did not, at present, face a tradeoff between its employment and inflation objectives, and an expansion of aggregate demand would result in further progress relative to both objectives," the minutes read.
The dollar was up against the yen, with USD/JPY up 0.05% at 101.38 and up against the Swiss franc, with USD/CHF up 0.17% at 0.8936.
The greenback was down against the pound, with GBP/USD up 0.34% at 1.6896.
The pound firmed official data showed that retail sales in the U.K. jumped 1.3% in April, more than double forecasts for a 0.5% increase, driven by higher food sales over the Easter holiday.
The pound received an additional boost after the minutes of the Bank of England’s May meeting noted that some Monetary Policy Committee members believe the decision on when to raise rates is "becoming more balanced," indicating that they are becoming more hawkish about the argument for hiking interest rates.
The dollar was up against its cousins in Canada, Australia and New Zealand, with USD/CAD up 0.11% at 1.0918, AUD/USD down 0.06% at 0.9236 and NZD/USD down 0.09% at 0.8566.
The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.06% at 80.15.
On Thursday, the U.S. is to release its weekly report on initial jobless claims and private sector data on existing home sales.