Dollar fell in European trade on Wednesday against a basket of major rivals, extending losses for second day away from two-week highs on profit-taking. 

Such decline comes ahead of the Fed's latest meeting minutes, which will provide clues on the path forward for policies and interest rates. 

The Index

The dollar index fell 0.25% to 106.81, with a session-high at 107.22, after closing down 0.6% yesterday, the first loss in four days on profit-taking off two-week highs at 107.99.

Fed Minutes

As of 19:00 GMT, the Federal Reserve will release the minutes of the November 1-2 meeting, at which policy makers voted to increase interest rates by 75 basis points for the fourth time in a row to 4%, the highest since December 2007.

The Fed asserted back then the fight against inflation requires continuous increases in borrowing rates until consumer prices are brought under control.

Interest Rate Prospects

Markets now are pricing a 75% chance of a 0.5% rate hike in December, and a 25% chance of a 0.75% rate hike.

Naturally, a bullish spirit in the minutes will bolster the dollar's standing, however a bearish statement will sharpen its losses. 

UK services PMI stabilized at 48.8 in November without change from the October reading, beating estimates of 48.0.

UK manufacturing PMI stabilized at 46.2 in November with no change, continuing the cycle of contraction for the fourth month, and beating estimates of 45.7. 

Gold prices settled in European trade in a tight range of trading near two-week lows as investors shun new positions ahead of the Fed's last meeting minutes. 

The minutes will provide clues on the future of US monetary policy and the pace of interest rates. 

Prices Today

Gold prices traded around $1,738 an ounce as of 08:55 GMT, with a session-high at $1,745. 

Gold prices closed Tuesday over 0.1% higher, the first profit in five sessions away from two-week lows at $1,732.50.

The Fed

As of 19:00 GMT, the Federal Reserve will release the minutes of the November 1-2 meeting, at which policy makers voted to increase interest rates by 75 basis points for the fourth time in a row to 4%, the highest since December 2007.

The Fed asserted back then the fight against inflation requires continuous increases in borrowing rates until consumer prices are brought under control.

Interest Rate Prospects 

Markets now are pricing a 75%  chance of a 0.5% rate hike in December, and a 25% chance of a 0.75% rate hike.

Estimates

Markets remain a bit jittery ahead of Fed's minutes, with some analysts expecting some modest gains for gold prices until year's end as the dollar weakens gradually.

The SPDR

Gold holdings at the SPDR Gold Trust rose 0.87 tones yesterday, the second increase in a row to a total of 906.93 tones, the highest since November 14.