Investing.com - The dollar gained against the yen in Asia on Thursday after the Fed minutes mixed optimism about the economy and concern about financial markets, signaling that rate hike plans for 2018 are on track,
USD/JPY changed hands at 111.32, up 0.09%, while AUD/USD traded at 0.7614, down 0.09%.
Federal Reserve officials expressed largely optimistic views of economic growth at their most recent meeting but also started to worry that market prices are getting out of hand and posing a danger to the economy.
Minutes from the November Federal Open Market Committee meeting indicated solid views on growth – the labor market, consumer spending and manufacturing all were showing solid gains. While there were disagreements on the pace of inflation, sentiment otherwise was largely positive.
“In their discussion of the economic situation and the outlook, meeting participants agreed that information received since the FOMC met in September indicated that the labor market had continued to strengthen and that economic activity had been rising at a solid rate despite hurricane-related disruptions,” the minutes stated.
However, when it came to evaluating market conditions, the talk took a more cautious tone.
“In light of elevated asset valuations and low financial market volatility, several participants expressed concerns about a potential buildup of financial imbalances,” the minutes stated. “They worried that a sharp reversal in asset prices could have damaging effects on the economy.”
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, dipped 0.02% to 93.13.
Overnight, the dollar fell against a basket of major currencies pressured by a rebound in the euro as fears that the German collation collapse would weigh on the European economy eased.
The dollar struggled to stem losses against the euro as traders appeared to unwind their bearish bets on the euro which followed German chancellor Angela Merkel’s failure to form the country’s next government.