Dollar holds gains in thin trading as markets await Fed minutes, US GDP

The dollar held gains on Tuesday as markets awaited signals, expected later this week, about the potential timing of rate cuts by the Federal Reserve. The yen trimmed losses from a day earlier when worse-than-expected Japanese economic data stirred expectations that the government would ramp up stimulus. The Aussie dollar edged lower after the release of Reserve Bank of Australia’s minutes from its February meeting. Trading was thin with many markets in Asia closed for the Lunar New Year holiday and following the President’s Day holiday in the US Key economic events lie later in the week, with minutes from the Fed’s last meeting and advance figures on US gross domestic product. “We’re quite positive on the US economy,” said Kristina Clifton, senior currency strategist at Commonwealth Bank of Australia in Sydney. “The market is currently pricing a high chance of a June interest rate cut, which is also our view. However, we differ from the market in that we expect a follow-up cut in July.”