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Federal Reserve Minutes and Jobs Data to Affect Dollar Performance

The U.S. dollar weakened Wednesday, giving back some of its gains from the previous session.

Glasses and 100 Dollar Bills
Glasses and 100 Dollar Bills

Investors are looking for clues about future U.S. monetary policy from the Federal Reserve's December meeting minutes, which will be released later in the day. In December, the Fed hiked interest rates by 50 basis points slower than at its previous four meetings. The minutes from this meeting could provide insight into what policymakers are considering heading into the first meeting of the year in February.

In addition to the release of the Federal Reserve minutes, there is also data on jobs being released this week, including the official monthly jobs report on Friday. The JOLTs report on job openings for November, which is due later Wednesday, is expected to show 10 million openings, a decrease from the prior month.

Euro, Yen, and Pound See Movement

The EUR/USD rose 0.6% to 1.0614, following news that the Spanish services sector expanded for the second consecutive month in December. Meanwhile, French inflation unexpectedly fell in December to 6.7%, down from 7.1% in November. Economists had predicted the figure would increase slightly to 7.2%.

The USD/JPY fell 0.7% to 130.07, with the yen showing some strength despite data showing that Japanese manufacturing activity contracted for a second consecutive month due to rising inflation and weak international demand.

The GBP/USD rose 0.9% to 1.2075, with the sterling rebounding after falling 0.7% overnight.

Australian Dollar and Chinese Yuan See Movement

The risk-sensitive AUD/USD soared 2.1% to 0.6871. The USD/CNY fell 0.5% to 6.8811, despite China facing a significant increase in COVID-19 infections after relaxing several anti-COVID restrictions in December.