Fed minutes give slight boost to dollar

NEW YORK: The dollar gained slightly on the euro Wednesday after the minutes to the last Federal Reserve policy meeting showed an increase in sentiment toward reeling in its QE bond-buying this year.

The gain was limited in part because the minutes represented sentiment in mid-March, before the dismal job creation numbers released last week quelled a rising optimism about the US economy.

At 2100 GMT, the euro was at $1.3068, down from $1.3080 late Tuesday.

The dollar pushed to 99.76 yen from 98.98 Tuesday, while the euro hit 130.37 yen, from 129.47.

The minutes of the March 19-20 meeting of the Federal Open Market Committee showed policymakers were increasingly discussing whether to begin reducing the $85 billion a month quantitative easing bond-buying program sometime this year.

"Many participants... expressed the view that continued solid improvement in the outlook for the labor market could prompt the Committee to slow the pace of purchases beginning at some point over the next several meetings," the minutes said.

A tightening of monetary policy would send interest rates higher, and draw more demand for the dollar.

But the Fed meeting took place after the strong February jobs report excited optimists. The March jobs report, released last Friday, showed only 88,000 net jobs were generated last month, and analysts said that was likely to quell any early push to reduce QE bond-buying.

"In particular the more dovish FOMC members will certainly use the weaker numbers in recent weeks to underpin the need to maintain the current policy stance for longer," said Harm Bandholz of UniCredit Economics.

"We continue to believe that forex traders should discount the minutes because since the last meeting, we have seen a huge pullback in job growth, decline in consumer confidence, slower manufacturing and service sector activity," said Kathy Lien of BK Asset Management.

The British pound pushed slightly higher on the dollar, to $1.5326 from $1.5321. The Swiss franc was flat at 0.9323 francs per dollar.