Dollar extends losses ahead of Fed's minutes

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.