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Dollar edges up as Fed minutes offer little new insight

The dollar firmed slightly against the euro as traders digested Federal Reserve meeting minutes that offered little new insight on the direction of US monetary policy.

NEW YORK: The dollar firmed slightly against the euro on Wednesday as traders digested Federal Reserve meeting minutes that offered little new insight on the direction of US monetary policy.

The minutes of the Federal Open Market Committee's April 29-30 meeting showed Wednesday the policy makers launching into how they should prepare the ground for lifting the benchmark federal funds rate from near zero, expected in mid-2015.

Fed officials discussed several approaches to policy when they raise short-term interest rates, but decided further study was needed.

"The minutes were pretty generic and not much different from the actual statement" issued by the FOMC after the meeting, said Nomura analysts in a research note. "Overall, there was little new information on the exit strategy."

Kathy Lien of BK Asset Management said the FOMC minutes had a limited impact on the dollar.

"While the central bank is comfortable with the current pace of tapering and intends to end QE in 2014 they provided no additional hints on when rates will rise," Lien said.

The euro slipped to $1.3663.

The Bank of Japan on Wednesday doused expectations of more easing measures in coming months, saying the world's number-three economy was improving despite concern that a sales tax rise will derail recovery. The yen rose against the euro but fell against the greenback.

The British pound benefited from rising expectations that the improving economy will drive the Bank of England to raise its record-low interest rate.

Britain's retail sales soared 6.9 percent in April from a year ago, official data showed Wednesday. That was the fastest year-over-year growth for a decade and signalled that Britain's economic recovery has picked up more speed in the second quarter.

Minutes from the Bank of England's May 7-8 meeting indicated policymakers were edging towards hiking its key lending rate from 0.50 percent amid increasing optimism over the economic outlook.

"A strong UK retail sales report and a slight hawkish tone to the BoE minutes has prompted a spike in sterling," said Craig Erlam, market analyst at Alpari.

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