Investing.com -- EUR/USD closed slightly higher during a choppy end to Thursday's session, after the release of dovish minutes from the Federal Open Market Committee's September lent support to a delayed interest rate hike beyond the end of the year.
The currency pair traded between a low of 1.1238 and a high of 1.1326 before settling at 1.1275, up 0.0038 or 0.33% on the session. The euro surged to two-week highs shortly after the release, before paring most of the gains late in the trading day. The pair has remained in a holding pattern over the last two weeks of trading, reflecting investors' hesitancy to make any moves before both the European Central Bank and the FOMC meet later this month. EUR/USD has failed to close by more than 1% in a positive or negative direction over the last 13 sessions.
EUR/USD likely gained support at 1.1103, the low from Sept.23 and was met with resistance at 1.1460, the high from Sept.18.
During its September monetary policy meeting, the FOMC voted nearly unanimously to leave its benchmark Federal Funds Rate unchanged, marking the 55th consecutive meeting that it decided to hold rates at its current near-zero level. Citing mounting concerns related to slowing growth in China along with a host of emerging market economies, the Federal Reserve decided the timing was not appropriate to normalize monetary policy. The deceleration in economic growth, according to the minutes, led to a spike in the dollar, which the Fed believes is holding down inflation.
Long-term inflation has remained under the Fed's targeted goal of 2% in every month for the last three years. The FOMC also expressed trepidation that a premature rate hike could "erode the credibility" of its inflation objective, if long-term inflation stayed below 2% for a prolonged period. In September, the Fed forecasted that its preferred gauge of inflation will not reach its 2% target until at least the end of 2018.
The relatively dovish minutes from the September meeting may bolster arguments that the FOMC could wait as long as March of next year before lift-off. Previously, it was widely believed the FOMC could raise rates either this month or when it meets in December. A rate hike is viewed as bullish for the dollar, as foreign investors pile into the greenback looking to capitalize on higher yields.
The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, fell to an intraday low of 95.17 on Thursday, its lowest level since Sept. 11. After paring some of the losses in the afternoon session, the index closed at 95.39, down 0.20% on the day.
Yields on the U.S. 10-Year rose three basis points to 2.10%, while yields on German bunds fell one basis point to 0.58, as the spread between U.S. and Germany government bonds widened. Shortly before the release of the Fed minutes, yields on U.S. 10-year Treasuries were at 2.09%, up slightly for the session.