Minutes from the Fed's March 15-16 policy meeting released on Wednesday showed that policymakers debated whether an interest rate hike would be needed in April though a consensus emerged that risks from a global economic slowdown warranted a cautious approach.
Policymakers had signalled at the close of that meeting that they expected to raise rates twice in 2016 but the timing of the hikes still appears up in the air.
The latest Federal Open Market Committee meeting showed Wednesday Kansas City Fed President Esther George had some support of her view another rate hike was appropriate from a couple non-voting members.
The committee held steady the policy fed funds rate at 0.25% to 0.50% on a 9-1 vote with George dissenting from the decision preferring instead the committee raise the target range for the rate to 0.50% to 0.75%.
"Most participants," which includes all 17 board members and regional Fed presidents, agreed with the voting majority that it was appropriate to keep the fed funds rate where it has been since December when the FOMC raised rates for the first time since 2006.
A top Federal Reserve official repeated on Wednesday she expects a gradual series of interest rate hikes this year given recent U.S. economic strength.
Cleveland Fed President Loretta Mester, a voter on central bank policy this year under a rotation, largely repeated a speech she gave last week in New York.
"It will be appropriate to continue to gradually reduce the degree of accommodation this year," she told the Cleveland Association for Business Economics.
On Wednesday night, St. Louis Fed President James Bullard separately said the United States needs a long-term economic plan including tax and education reform to revive growth, not rely on more monetary or fiscal stimulus for a short-term boost.
That is one reason the dollar was down at 109.70 yen JPY= after hitting its lowest since late October 2014 at 109.36. The yen climbed broadly with heavy buying seen against the euro, Swiss franc and Australian dollar.
The dollar was also soft on its own account with the euro up at $1.1405 EUR= and not far from the recent 5-1/2-month peak of $1.1437. The dollar was likewise near a 5-1/2-month low against the Swiss franc of 0.9532 franc CHF=.
Against a basket of currencies the dollar was pinned at 94.411 .DXY, again near its lowest since October.
The drop in the dollar added to gains in oil which jumped 5 percent overnight as U.S. inventories unexpectedly fell and investors gauged the possibility of an output freeze.
Brent crude futures LCOc1 were up 29 cents at $40.13 on Thursday, a marked turnaround from a one-month low of $37.27 hit on Tuesday. U.S. crude CLc1 rose 40 cents to $38.15.
After hitting one-month lows a day earlier, oil prices rallied by as much as $2 a barrel after the Energy Information Administration (EIA) said crude stockpiles dropped by 4.9 million barrels last week from lower imports and a continued ramp up in refinery runs.
Reference: Reuters, Investing
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