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Read for 4 minutes TOKYO, Japan (Reuters) – On Thursday, the dollar rose to near three-month highs against key rivals after minutes from the Federal Reserve’s June policy meeting revealed the world’s largest central bank is working toward tapering its asset purchases as early as this year. PHOTO FROM THE FILE: This artwork from May 26, 2020 depicts a US dollar currency. REUTERS/Dado Ruvic/Illustration/File Photo/File Photo REUTERS/Dado Ruvic/Illustration/File Photo/File Photo After touching 92.844 overnight for the first time since April 5, the dollar index, which measures the greenback against six rivals, pushed up to 92.759. According to the minutes of the Federal Open Market Committee’s (FOMC) June policy meeting released Wednesday, substantial further progress on economic recovery “was generally seen as not having yet been met,” though participants expected progress to continue and agreed they must be ready to act if inflation or other risks materialize. According to the minutes, “a number of participants” at the session still believed that requirements for curbing bond-buying, which is infusing markets with liquidity, would be “met somewhat earlier than they had anticipated,” while others saw a less clear signal from incoming data. The Fed is expected to disclose a strategy for tapering its asset purchases in August or September, according to economists polled by Reuters. While the majority of respondents believe the first cut to its bond-buying program would occur early next year, nearly a third believe it will occur in the fourth quarter of this year. “The FOMC remains one of the more hawkish central banks under our coverage,” Commonwealth Bank of Australia strategist Carol Kong wrote in a client note, “and will begin to consider a taper at the policy meeting at the end of this month.” “As a result, we anticipate the USD to trade with an upward tilt.” The dollar was unchanged at $1.1791 per euro, barely below a three-month high of $1.17815 reached overnight after German data cast doubt on Europe’s economic rebound. The ZEW economic research center revealed that investor sentiment in Germany, the euro zone’s largest economy, declined dramatically in July, but it remained quite strong. President Christine Lagarde of the European Central Bank will hold a press conference later Thursday after the monetary authority releases the results of an 18-month strategy review, which is expected to include a shift in the inflation target to 2% from the current “below but close to 2%” – which would theoretically allow for inflation overshoots. The dollar was slightly lower at 110.585 yen elsewhere, as the pair was pulled down by a drop in US Treasury yields. In Asia on Thursday, the benchmark 10-year Treasury note yielded 1.3196 percent, down from 1.2960 percent overnight for the first time since mid-February. The Australian dollar, which is usually regarded as a proxy for risk appetite, fell 0.2 percent to $0.74650, but remained towards the middle of the three-week broad range. To lift inflation, Reserve Bank of Australia Governor Philip Lowe underlined on Thursday that the unemployment rate must fall further and remain in the low 4% range, an outcome not likely until 2024. The central bank had taken the first move toward stimulus tapering the day before, stating that the third round of its quantitative easing program would be less than the previous two. Meanwhile, the New Zealand dollar fell 0.4 percent to $0.69920, falling below the psychologically significant 70 cent threshold. ======================================================== At 0400 GMT, currency bid prices were set. RIC RIC RIC RIC RIC RIC Change in U.S. Close Pct YTD Pct High Bid Low BidPrevious Change in U.S. Close Pct Session Euro/Dollar$1.1792 $1.1792 +0.01% -3.48 percent +1.1798 +1.1784Dollar/Yen110.5600 110.6100 -0.01% +7.08 percent +110.6600 +110.4300Euro/Yen130.36 130.41 -0.04 percent +2.71 percent +130.5300 +130.1700Dollar/Swiss0.9255 0.9259 -0.04 percent +4.61 percent +0.9261 + Dollar/Dollar 0.6989 0.7018 -0.40 percent -2.66 percent +0.7019 +0.6982 -0.40 percent -2.66 percent Each and every location Locations in Tokyo, Europe Volatilities BOJ provides information on the Tokyo foreign exchange market. Kevin Buckland contributed reporting, and Shri Navaratnam edited the piece./nRead More

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