Dollar steadies as markets await Fed minutes and policy speeches

After European bond markets calmed, the dollar stayed weak as traders focused on the Fed’s September 15-16 meeting minutes and speeches from policymakers. The euro jumped to its strongest level in seven weeks following Marine Le Pen’s promise of larger fiscal reductions, while French bond yields fell. The yen weakened further even after BOJ board member Ayano Sato said she would back staged rate hikes.

Fed officials have appeared less hawkish after lower-than-expected PCE and payroll figures, prompting a drop in the probability of an October hike to about 20.5 percent, with most bets now on a December move. Kansas City Fed President Jeff Schmid still argued for additional tightening, and other speakers including Christopher Waller, Neel Kashkari and Alberto Musalem are slated to speak later in the day. Market participants also await consumer credit data expected to show a decline from July to August.