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Most Read: US Dollar Muted Ahead of Fed Minutes; Setups on EUR/USD, USD/JPY & USD/CAD

The U.S. dollar (DXY index) sustained small losses in late afternoon trading in New York on Wednesday despite the advance in U.S. Treasury yields following the release of the minutes of the Jan. 30-31 FOMC conclave.

According to the summarized record of the proceedings, policymakers felt it would be inappropriate to begin lowering interest rates until they had a stronger conviction that consumer prices would move sustainable toward the 2.0% target.

The fact that the central bank needs to see more evidence of disinflation before removing policy restriction suggests that the easing cycle is unlikely to begin soon and could even be delayed to the second half of the year.

If the Federal Reserve decides to postpone its interest adjustments, we could see U.S. bond yields nudge upwards in the near term, boosting the U.S. dollar in the process. This could result in the DXY index hitting fresh yearly highs moving into March.

With the greenback biased to the upside for the time being, currency pairs such as EUR/USD and GBP/USD may struggle to gain upward traction in the coming days and weeks. Meanwhile, pairs like USD/JPY and USD/CAD may find less resistance in their ascent.

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