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Dollars, Fed minutes, Brexit in focus



The dollar was higher against its main counterparts on Thursday after the Fed's September meeting just minutes later confirmed expectations that the central bank would likely continue to raise interest rates this year.

Each Fed policymaker has supported interest rate hikes over the past month, and generally agreed upon borrowing costs should continue to rise.

Interest rate futures are now pricing in a 83% probability that the Fed will raise interest rates in December. This is from the FedWatch tool of the CME group, the fourth increase this year. Two more increases are likely for next year.

The dollar index, which measures its value against six major competitors, was trading at 95,664, up 0.1

percent on Thursday.

"The dollar is bid as there is support following the publication of the FOMC Protocol," said Ray Attrill, head of currency strategy at NAB.

"Dollar bulls are playing with the view that the market is undervaluing what the US Federal Reserve can afford," Attrill added.

U.S. Benchmark 10-year Treasury yields climbed to 3.2 percent on Thursday. The last time they acted below the psychologically important 3 percent level was September 18th.

The euro changed hands on Thursday to $ 1,1501.

The British pound lost 0.12 percent against the dollar on Thursday at $ 1.3096, weakening after EU chief commissioner Michel Barnier said on Wednesday that more time was needed to reach an exit deal for the UK to reach.

The Canadian dollar changed hands at 1.3022. The dollar has gained 1.6 percent over the loonie in the last twelve trading sessions.

The Japanese yen broke a four-day winning streak against the US dollar on Wednesday as the greenback gained 0.65 percent against the Japanese currency.

The yen changed its course to $ 112.65 on Thursday. The dollar has gained 0.9 percent against the yen since Monday, as the yen reached a one-month high of 111.61.

The Australian dollar, often referred to as the barometer of global risk appetite, moved to $ 0.7126 on Thursday, gaining 0.24 percent against the greenback on a strong unemployment report.

The Australian reached a two-year low of $ 0.7039 on October 5 and analysts continue to believe that the currency will remain under pressure.

"The combination of stronger US dollar and commodity price pressures could test a two-year low of $ 0.7040 in the coming sessions," said Michael McCarthy, CMC Markets chief market strategist in Sydney.

In a document eagerly awaited by the markets, the US Treasury's semi-annual report released Wednesday did not cite China or any other trading partner as a currency manipulator.

"The fact that they refrained from referring to China as a currency manipulator is a positive development, especially from the point of view of emerging market currencies," said Attrill.


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