USD Eases as Fed Minutes Calm Hawkish Policy Fears

The US dollar retreated modestly as June FOMC meeting minutes alleviated concerns about an overly hawkish Federal Reserve stance. The minutes revealed a more balanced approach among policymakers, with several members acknowledging progress on inflation while maintaining data dependency. This tempered tone contrasted with recent hawkish market pricing, prompting a recalibration of rate expectations. Treasury yields pulled back from recent highs, reducing the dollar's yield advantage against major currencies. EUR/USD found support above 1.0800, while GBP/USD stabilized near 1.2700. The minutes suggested the Fed remains patient on policy adjustments, waiting for clearer economic signals before committing to a specific path. Near-term dollar direction will likely depend on upcoming inflation and employment data. Technical indicators show the dollar index testing support at 105.80, with a break below potentially accelerating the correction toward 105.50.