Anna 
The U.S. dollar retraced some of its gains from the prior session on Thursday, yet remained close to a one-week high after the release of hawkish minutes from the most recent Federal Reserve meeting, signaling that U.S. interest rates would likely stay elevated for an extended period.
At 08:20 GMT (04:20 ET), the Dollar Index, which measures the performance of the greenback against a basket of six major currencies, edged 0.1% lower to 104.705, following a 0.3% increase overnight.
The minutes from the Fed’s late-April meeting revealed growing concerns among policymakers regarding persistent inflation, prompting discussions among some officials about the potential need for further rate hikes to combat inflationary pressures.
“While the general view was that policy was ‘well positioned,’ many members were open to more hikes if needed. Incidentally, ‘many’ participants questioned whether policy was restrictive enough,” noted ING in a statement.
Subsequent speeches by several Fed officials have underscored their apprehensions regarding inflation levels, reinforcing the cautious stance adopted by the central bank.
Despite the hawkish sentiment, the Fed is perceived as unlikely to implement additional interest rate hikes. Consequently, markets are now factoring in a higher likelihood that the central bank will maintain elevated interest rates for an extended duration.
Later in the session, traders will closely monitor remarks from Atlanta Fed Chair Raphael Bostic, along with manufacturing activity data for May, for further insights into the Fed’s policy outlook.
