Dollar weakens

TOKYO: The dollar lost momentum on Thursday after the double-whammy of dovish-looking minutes of the Federal Reserve´s last policy meeting and the threat by U.S. President Donald Trump of imposing new tariffs on imported cars.

The euro was hampered by concerns over an economic slowdown in the currency bloc and political risks in Italy, staying near a six-month low against the dollar and a nine-month nadir versus the yen.

Measured against a basket of six major currencies , the dollar stepped back to 98.865 from its five-month high of 94.195 hit just before the release of the Fed´s minutes.

While most policymakers thought it likely another interest rate increase would be warranted - in line with market expectations - the minutes showed the Fed would tolerate inflation rising above its goal for a time. "The minutes suggested the Fed is not in a hurry to raise interest rates. The U.S. stock markets seem to like that they were not too hawkish," said Ayako Sera, market economist at Sumitomo Mitsui Trust bank.

Moreover, the minutes also showed the board members generally agreed to make a small adjustment in its policy implementation by raising the interest rates on its excess reserves by 20 basis points, rather than by a widely anticipated 25 basis points.