Investing.com - The euro edged lower against the dollar on Wednesday ahead of the release of the Federal Reserve''s April policy meeting minutes, which markets were hoping would contain language suggesting the economy is recovering and needs less monetary support.
In U.S. trading, EUR/USD was down 0.26% at 1.3666, up from a session low of 1.3652 and off a high of 1.3723.
The pair was likely to find support at 1.3649, Thursday''s low, and resistance at 1.3734, Monday''s high.
Investors were eager to view the minutes from the Fed’s April monetary policy meeting for insight on the central bank''s view of the economy.
The Fed has been tapering its asset-purchasing program this year amid signs that the recovery in the labor market is continuing, but has also reiterated that rates are likely to remain at record lows for a considerable time after the stimulus program ends.
On Tuesday, New York Fed President William Dudley reiterated the central bank’s dovish stance, saying the pace of rate hikes was likely to be “slow”.
Still, Philadelphia Fed President Charles Plosser said rates should rise sooner rather than later, which boosted the dollar on Wednesday.
"My own view is that, as we continue to move closer to our 2 percent inflation goal and the labor market improves, we must be prepared to adjust policy appropriately. That may well require us to begin raising interest rates sooner rather than later," Plosser said in prepared remarks of a speech he delivered in Washington Tuesday.
"On monetary policy, reducing the pace of asset purchases in measured steps is moving in the right direction, but the pace may leave us behind the curve if the economy continues to play out according to FOMC forecasts."
The euro, meanwhile, came under pressure on expectations that the European Central Bank will ease monetary policy at its next meeting in June and after data last week showing that the euro zone economy grew at a slower than forecast rate in the first quarter.
The euro was down against the pound, with EUR/GBP down 0.50% to 0.8096, and down against the yen, with EUR/JPY down 0.15% at 138.63.
The pound firmed official data showed that retail sales in the U.K. jumped 1.3% in April, more than double forecasts for a 0.5% increase, driven by higher food sales over the Easter holiday.
The pound received an additional boost after the minutes of the Bank of England’s May meeting noted that some Monetary Policy Committee members believe the decision on when to raise rates is "becoming more balanced," indicating that they are becoming more hawkish about the argument for hiking interest rates.
On Thursday, the euro zone is to release data on manufacturing and service sector activity, while Germany and France are to release individual reports.
The U.S. is to release its weekly report on initial jobless claims and private sector data on existing home sales.
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