Investing.com -- EUR/USD inched up, remaining largely unchanged after the minutes from the Federal Reserve's March meeting on Wednesday afternoon portrayed a fractious U.S. central bank, divided on whether it will be appropriate to raise short-term interest rates at the end of this month.
The currency pair traded in a tight range between 1.1327 and 1.1431, before settling at 1.1397, up 0.0017 or 0.14% on the session. The euro halted a brief two-day losing streak from the start of the week, which came in response to a strong five-day rally last week. With the slight gains, EUR/USD closed above 1.13 for the sixth straight session. Since the Federal Reserve lowered its long-term interest rate forecast on March 16, the euro has soared more than 2.4% against its American counterpart.
EUR/USD likely gained support at 1.0538, the low from December 3 and was met with resistance at 1.1496, the high from Oct. 15.
When the Federal Open Market Committee (FOMC) last met in mid-March, several members wanted to consider the possibility of raising interest rates at the meeting, while leaving a potential rate hike on the table when it meets again on April 26-27. The majority of the members expressed caution at raising rates prematurely, the minutes showed, amid concerns that global economic headwinds will only "subside slowly," in the near-term future. Kansas City Fed president Esther George dissented at the meeting, judging that the Committee should place a higher priority on meeting its "longer-run objectives," above short-term pressure from a risky global economy.
At the meeting, the FOMC voted 9-1 to hold its benchmark Federal Funds Rate at a targeted range between 0.25 and 0.50%, with George serving as the lone dissented. The FOMC has left short-term rates steady at each of its first two meetings this year, following its historic meeting in December when it abandoned a seven-year zero interest rate policy by implementing a 25 basis point hike.
With rates at near-zero levels, other members appeared worried that the FOMC might be running out of ammunition to bolster the economy in the case it suffered an unforeseen shock.
In terms of inflation, the FOMC noted that Personal Consumption Expenditures (PCE) appeared to "pick up" in the first quarter, in light of gains in motor vehicle sales and real disposable income in January. Earlier in the first quarter the Core PCE Index, which strips out volatile food and energy prices, rose to 1.7%, its highest level since February, 2013. Core PCE inflation is the FOMC's preferred gauge for price stability. Still, the majority of the members saw downside risks to their inflation forecasts on a longer term basis. Core PCE inflation has remained under the Fed's 2% targeted objective for every month over the last three years.
A wave of FOMC policymakers are scheduled to speak later this week, including Yellen, who will appear at a panel with former Fed chairmen Ben Bernanke, Alan Greenspan and Paul Volcker on Thursday in New York.
The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, fell more than 0.25% to an intraday low of 94.25, before inching back up to settle at 94.49. The index was relatively flat following the release of the minutes. With the slight declines, the Index remains near five-month lows.
Elsewhere, USD/JPY fell to an 18-month low at 109.34, before closing at 109.83, down 0.50% in Wednesday's session.