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·         The dollar edged higher versus a basket of currencies on Wednesday, with investors awaiting the minutes of the Federal Reserve’s last policy meeting for hints on the pace of further U.S. monetary tightening.

The dollar index .DXY, which measures the currency against a basket of six major peers, rose 0.1 percent to 93.681. On Monday, the index set a five-month high of 94.058.

The increase marked a gain of more than 5 percent from mid-April and was driven by generally upbeat U.S. economic data and expectations the Fed would raise interest rates at least two more times this year.

·         The US dollar is mixed ahead of the release of the minutes from May’s Federal Open Market Committee (FOMC) meeting. The central bank held rates unchanged but there is almost 100 probability of a 25 basis points rate hike at end of the June 13 meeting. Commodity currencies were higher at the beginning the North American trade session only to fall as commodity prices gave way. Safe haven currencies rose after US President Trump said the June 12 Peace summit between North and South Korea could be delayed.

·         The yen gained broadly on Wednesday, as investors sought safer assets amid economic concerns after U.S. President Donald Trump tempered optimism over progress made so far in trade talks between the world’s two largest economies. Trump said on Tuesday he was not pleased with recent trade talks between the United States and China.

Further weighing on the prices of riskier assets, Trump also said there was a “substantial chance” his summit with North Korean leader Kim Jong Un will not take place as planned on June 12 amid concerns that Kim is resisting giving up his nuclear weapons.

Against the yen, the dollar fell 0.3 percent to 110.53 yen JPY=, pulling away from a four-month high of 111.395 yen set on Monday.

·         The euro EUR= fell 0.1 percent to $1.1762, edging back in the direction of a six-month low of $1.1717 set on Monday.

·         Divisions among Federal Reserve officials over the yield curve and inflation will be under scrutiny on Wednesday when the U.S. central bank releases minutes of its policy meeting at the start of the month.

·         “We’ve heard a lot of Fed officials say they were comfortable with an overshoot of inflation” above the central bank’s 2 percent target, said Joseph Song, senior U.S. economist at Bank of America Corp. “Some others are worried higher inflation could lead to a de-anchoring of inflation expectations. That’s a debate I hope is in the minutes.”

The record of the closed-door meeting, to be published at 2 p.m. in Washington, may also reveal why officials decided to make a subtle but widely noted change in the May 2 FOMC statement, adding a second reference to the “symmetric” nature of the Fed’s inflation target. The Fed has used that term in every FOMC statement since March 2017. By inserting it a second time, policy makers seemed 

·         China will steeply cut import tariffs for automobiles and car parts, opening up greater access to the world’s largest auto market amid an easing of trade tensions with the United States.

Import tariffs will be cut to 15 percent from 25 percent for most vehicles from July 1, the Ministry of Finance said on Tuesday, adding that this was part of efforts to open up China’s markets and spur development of the local auto sector. A small number of imported trucks are taxed at 20 percent currently.

·         China’s ZTE Corp (000063.SZ)(0763.HK) is estimating losses of at least 20 billion yuan ($3.1 billion) due to Washington’s ban on U.S. firms supplying the telecommunications firm, Bloomberg reported on Wednesday, citing unnamed sources.

·         Saudi Arabia’s economic reforms are going well, the International Monetary Fund said after annual consultations with authorities, urging the government not to boost spending in line with climbing oil prices.

He predicted economic growth would start picking up this year, after gross domestic product shrank last year for the first time since 2009.

·         France’s foreign minister said on Wednesday he disagreed with the United States’ decision to scrap the Iran nuclear deal and warned that its method of adding more sanctions on Tehran would reinforce the country’s hardliners.

·         North Korea has accepted a list of South Korean reporters to visit their nuclear testing site after a days-long tug of war with Seoul, South Korea’s unification ministry said on Wednesday.

North Korea invited a handful of media from a number of countries to witness the dismantling of the Punggye-ri testing site to uphold its pledge to discontinue nuclear tests. However, it had declined to take the South Korea reporters after calling off planned inter-Korean talks in protest against U.S.-South Korean air combat drills.

·         Oil prices eased on Wednesday as the possibility of higher OPEC output weighing on the market, although geopolitical risks are expected to keep prices near multi-year highs.

Brent LCOc1 futures fell 37 cents, or nearly 0.5 percent, to $79.20 a barrel by 0636 GMT, after climbing 35 cents on Tuesday. Last week, the global benchmark hit $80.50 a barrel, the highest since November 2014.

U.S. West Texas Intermediate (WTI) crude CLc1 futures eased 21 cents, or nearly 0.3 percent, to $71.99 a barrel, having climbed on Tuesday to $72.83, also the highest since November 2014.

Reference: Reuters, CNBC,Bloomberg