TOKYO – The dollar slipped against the euro and yen Wednesday, while India’s rupee rebounded from a record low as traders await the release of minutes from the US Federal Reserve’s July meeting.
Trade was cautious ahead of the release of the minutes, with analysts expecting the Fed to soon announce the end of its year-long stimulus, which has helped fuel a global equity and forex rally.
In early Asian trade the greenback bought 97.25 yen, against 97.32 yen in New York on Tuesday, while the euro sat at $1.3423, against $1.3420.
The European unit broke $1.34 in New York for the first time since January after US Treasury yields fell to 2.81 percent from a two-year high of 2.88 percent reached Monday, as bonds appeared oversold after sinking for more than three months.
The single currency was also trading at 130.67 yen, from 130.60 yen.
Investors will be poring over the Fed minutes to find out “what kind of discussion took place over (the) possibility of reducing” its bond-buying known as quantitative easing (QE), Shinichiro Kadota, currency analyst at Barclays Capital, said in a statement.
But while expectations are high that QE is coming to an end India’s rupee, Asia’s worst-performing major currency this year, edged up to 63.37 against the dollar on Wednesday after falling to a record low 64.1 on Tuesday.
However, the Indonesian rupiah continued to fall, trading at 10,685 to the dollar on Wednesday, from 10,495 rupiah Tuesday, while the Thai baht was at 31.72 from 31.69.
Expectations the Fed will wind down QE has seen foreign investors repatriate the vast sums of cash that poured into emerging economies when the scheme was unveiled in September 2012, hammering currencies and equities.