Investing.com - The dollar pared losses against the yen and the other major currencies on Wednesday ahead of the release of minutes from the Federal Reserve’s latest policy meeting.
USD/JPY was down 0.39% to 119.85, off session lows of 119.64.
The dollar slid against the other major currencies on Wednesday amid concerns that the U.S. economic recovery is cooling. Last Friday’s unexpectedly weak jobs report for March reinforced the view that the recovery is slowing, following a string of other soft economic reports.
The weak data prompted investors to push back expectations for a rate hike to later in the year from midyear.
Investors were looking to the minutes for any indications that Fed officials are concerned over the impact of the strong dollar on the economic recovery.
New York Fed President William Dudley reiterated Wednesday that the timing of a rate hike depends on economic data and added that a rate hike in June could still be possible if the labor market recovery remained strong.
He added that the latest jobs report “surprised to the downside” but attributed recent signs of a slowdown in growth to winter weather, the strong dollar and the drop in oil prices.
The yen received a boost earlier Wednesday after the Bank of Japan left monetary policy unchanged despite a slowdown in inflation.
Japan’s central bank maintained the view that inflation will gradually rise as the economy recovers and higher wages prompt households to increase spending.
Meanwhile, EUR/USD was at 1.0827, off session highs of 1.0888.
In the euro zone, data on Wednesday showed that euro zone retail sales fell in February, snapping four straight months of gains.
The European Union’s statistics agency Eurostat reported that retail sales fell 0.2% in February, in line with market expectations. On a year-over-year basis, retail sales rose 3.0%, also in line with forecasts.
The report said gasoline sales fell for the first time since September, indicating that the boost to consumer spending from lower oil prices may be waning.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.38% to 97.86, off lows of 97.46.