USD Strengthens as FOMC Minutes Show Divided Fed on Rate Path

The US Dollar Index advanced 0.4% following the release of December FOMC meeting minutes, which revealed a split among Federal Reserve officials regarding the pace of future rate adjustments. Several committee members expressed concerns about persistent inflation risks, suggesting a more cautious approach to monetary easing in 2024. The hawkish undertones pushed EUR/USD down 45 pips to 1.0315, while USD/JPY climbed to 157.80. Market participants noted that the divided outlook reduces the likelihood of aggressive rate cuts previously priced in for early 2024. Technical indicators show the Dollar Index approaching key resistance at 108.50, with momentum oscillators signaling further upside potential. The minutes' impact extended across major pairs, with GBP/USD retreating to 1.2420 and AUD/USD falling below 0.6200. Traders should monitor upcoming inflation data and Fed speakers for clarity on the central bank's direction.