Investing.com – The dollar was little changed on Wednesday even after Federal Reserve Vice Chair Richard Clarida backed further rate hikes. Meanwhile, U.S.-China trade relations were also in focus as U.S. President Donald Trump and his Chinese counterpart Xi Jinping are expected to meet over dinner Saturday evening in Buenos Aires to resume trade talks later this week.
The U.S. dollar index that tracks the greenback against a basket of other currencies last traded at 97.275 by 12:42 AM (05:42 GMT), down 0.01%.
Traders are likely to look the minutes from the US Federal Reserve meeting held on Nov. 7 – 8 that will be released later this week. Those minutes could provide some indication of how fast or slow the Fed plans to hike interest rates next year.
On Tuesday, Federal Reserve Vice Chair Richard Clarida backed further rate hikes, but added that the tightening path would be data dependent, as the Fed approaches a “neutral stance.”
“Clarida comments certainly hinged toward hawkishness…we expect the Fed to remain consistent and adjust monetary policy according to incoming economic data which has so far been pretty robust,” said Stephen Innes, head of trading, APAC, at Oanda.
“We are expecting the Fed to raise rates in December and 3 times in 2019.”
Meanwhile, U.S.-China trade relations returned to focus after National Economic Council Director Larry Kudlow said the White House was having “a lot of communication with the Chinese government at all levels” and that President Donald Trump thinks there is a “good possibility” the two countries could reach an agreement.
“We’re having now a lot of communication with the Chinese government at all levels,” Kudlow told reporters on Tuesday. “We were at a total standstill. Nothing was going on.”
The USD/CNY pair traded 0.03% higher to 6.9550 as the People’s Bank of China (PBOC) set the yuan reference rate at 6.95 vs the previous day’s fix of 6.9463.
Elsewhere, the AUD/USD and the NZD/USD pair both gained 0.2%.
The USD/JPY pair edged up 0.1% to 113.88.