FOMC Minutes Unlikely To Help The Dollar

FOMC Minutes Unlikely To Help The Dollar

The U.S. Federal Reserve Open Market Committee's minutes, to be published later today, are unlikely to bring the dollar the support many expect.

On the contrary, they could remind the market that inflation fears within the Federal Reserve aren't so high and that expectations of U.S. rate hikes may have got ahead of themselves.

"We still doubt that the Fed has finished cutting rates and that market expectations for rate hikes at the end of 2008 are extremely unrealistic," said Rob Carnell, chief international economist with ING Financial Markets in London.

Suggestions that the U.S. central bank may be more concerned about price pressures, rather than an economic slowdown, and that its next move on rates is more likely to be up than down, rose over the last week or two as leading Fed officials repeatedly pointed to rising inflation risks.