2019.08.2116:39:00UTC+00Dollar Recovers After Early Weakness, Gains Against Major Rivals

The U.S. dollar recovered after a weak start on Wednesday, and edged further up after the release of the minutes of the Federal Reserve's July meeting.

The minutes showed the central bank intends to remain flexible with regard to future changes to interest rates, citing a lack of clarity about resolution of the risks to the U.S. economy.

The dollar index, which dropped to a low of 97.95 at one stage, rallied to 98.33 in late afternoon trades and was last seen at 98.30, up 0.11% from previous close.

Against the euro, the greenback was up 0.1% at 1.1087, after having weakened to 1.109 earlier in the day.

The pound sterling was weak against the dollar, with a unit of sterling fetching $1.2125, down from $1.2169 on Tuesday.

The safe haven Japanese Yen was weak as well against the greenback with the unit of the later fetching 106.60 yen. The yen had closed at 106.23 a dollar on Tuesday.

The dollar gained nearly 0.25% against the loonie at 1.3288, and about 0.5% against Swiss franc at 0.9829.

Data released this morning showed the annual inflation rate in Canada was at 2% in July 2019, unchanged from the previous month and above market expectations of 1.7%.

Month-on-month, inflation was up 0.5% in July. Core consumer price inflation for July came in at 2%.

Against the Aussie, the dollar was down slightly with the AUD-USD pair trading at 0.6780.

The minutes of the Federal Open Market Committee meeting held in late July showed members intend to pay close attention to the implications of incoming data for the economic outlook.

The decision to lower rates came even though participants generally judged that downside risks to the outlook for economic activity had diminished somewhat since their June meeting.

The Fed cited concerns about the outlook for inflation, with a number of participants noting that inflation had continued to run below the central bank's 2% target.

The minutes noted that a couple of participants preferred a 50 basis point cut in rates, favoring stronger action to better address stubbornly low inflation.

The minutes said a few participants expressed concerns the rate cut could be misinterpreted as a negative signal about the state of the economy.

The rate cut at the meeting was described as a "mid-cycle adjustment," with members hoping to avoid any appearance of following a preset course.

The central bank is under increasing pressure to cut rates from President Donald Trump, who has repeatedly slammed Fed Chairman Jerome Powell's approach to monetary policy in posts on Twitter.

Powell is scheduled to deliver a closely watched speech on the challenges for monetary policy at the Jackson Hole Economic Policy Symposium in Jackson Hole, Wyoming, on Friday.

Meanwhile, a report released by the National Association of Realtors today showed that existing home sales in the U.S. rebounded in the month of July, jumping by 2.5% to an annual rate of 5.42 million in July after slumping by 1.3% to a revised rate of 5.29 million in June.

Economists had expected existing home sales to surge up by 2.3% to a rate of 5.39 million from the 5.27 million originally reported for the previous month.