U.S. Dollar Drops Ahead Of FOMC Minutes

The U.S. dollar weakened against its major rivals in early European deals on Wednesday amid falling U.S. treasury yields, while investors awaited the minutes from the latest Fed meeting for more clues about the central bank's monetary policy outlook.

The minutes from the October 31 - November 1 meeting, due at 2:00 pm ET, would help investors to ascertain the likelihood of a rate hike in December. Further, investors closely scrutinize the minutes for more insights about its tightening cycle in 2018.

The benchmark yield on 10-year treasuries dropped 2.35 percent, while that of the 2-year equivalent was down by 1.77 percent. Yields move inversely to bond prices.

The Fed Chair Janet Yellen Tuesday said that the weak inflation is a "biggest challenge" to the bank and it is uncertain over whether the stubbornly low inflation is transitory.

"We expect [inflation] to move back up over the next year or two, but I will say I'm very uncertain about this," she said.

Besides FOMC minutes, today's economic calendar contains weekly jobless claims, University of Michigan's consumer confidence index and the durable orders.

The currency has been trading in a negative territory in the Asian session.

The greenback hit 2-day lows of 0.9887 against the franc and 111.95 against the yen, compared to Tuesday's closing values of 0.9914 and 112.44, respectively. Continuation of the greenback's downtrend may see it challenging support around 0.97 against the franc and 111.00 against the yen. The greenback that closed Tuesday's trading at 1.3238 against the pound dropped to 1.3262. The greenback is seen finding support around the 1.34 region. The greenback slipped to a 2-day low of 1.1773 against the euro, compared to 1.1738 hit late New York Tuesday. Further downtrend may see the greenback challenging support around the 1.185 area. Looking ahead, the UK Chancellor of the Exchequer will deliver the Autumn Budget at 7:30 am ET.

In the New York session, U.S. weekly jobless claims for the week ended November 18, durable goods orders for October and University of Michigan's final consumer sentiment index for November, as well as Eurozone preliminary consumer sentiment index for November are due.

At 2:00 pm ET, the Federal Reserve's minutes from the October 31-November 1 policy meeting are due.