Dollar Holds Near 18-Month High
The U.S. dollar remained close to an 18-month high on Thursday after minutes from the Federal Reserve’s latest meeting showed that policymakers continued to view inflation as the main risk to the economic outlook.
The dollar index was steady at 102.23 after rising 0.3% on Wednesday. The index remained close to its strongest level since April 2025.
The Federal Reserve unanimously raised interest rates by 25 basis points at its September 15–16 meeting, but the minutes showed that policymakers differed over the reasons for the increase.
Fed officials remain concerned about inflation
Some policymakers viewed the September rate increase as necessary to contain the impact of energy-price shocks and inflation expectations. Others saw the move as the beginning of a broader effort to address demand-driven inflation.
Most officials still considered additional tightening appropriate, while almost all policymakers believed inflation risks were tilted to the upside.
Despite the hawkish tone of the minutes, financial markets continue to expect the Fed to leave rates unchanged at its October meeting.
CME FedWatch showed only around a 19% probability of another 25-basis-point increase at the October meeting.
Yen and other currencies
The dollar eased 0.2% against the Japanese yen to 157.815 yen.
The yen received some support after Japan reported an August current-account surplus of 4.062 trillion yen, significantly above the median economist forecast of 3.19 trillion yen.
The euro was little changed at $1.1201, while the British pound also remained around $1.3215.
The Australian and New Zealand dollars were similarly stable.
For currency traders, the Fed minutes reinforce the importance of inflation and interest-rate expectations. The dollar remains supported by high U.S. yields, while the prospect of further Fed tightening continues to limit downside pressure on the greenback.
