FOREX-Dollar holds firm after Fed minutes support pace of taper

Wed Feb 19, 2014 7:29pm EST
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* Dollar pulls higher after Fed minutes show tapering plan intact

* Muted reaction to record Japan trade deficit

* Canadian dollar licks its wounds after sliding on dismal trade data

By Shinichi Saoshiro

TOKYO, Feb 20 (Reuters) - The dollar held firm against a basket of major currencies on Thursday, drawing support from minutes of the U.S. Federal Reserve which showed policymakers remained committed to reducing its massive stimulus at the current pace.

The euro was at $1.3731 pulling back from seven-week highs of $1.3773 against the greenback following the release of the Fed minutes on Wednesday.

The minutes of the Fed's Jan. 28-29 policy meeting, which was former chairman Ben Bernanke's last, showed several policy-makers wanted to emphasize that their asset-purchase program would be trimmed in predictable, $10-billion steps unless the economy's performance surprises them.

Policy makers' support for continued tapering nudged U.S. Treasury yields higher late on Wednesday, and provided some respite for the dollar.

Still, market participants remained cautious over the Fed holding up the pace of its tapering in the wake of recent data suggesting U.S. economic growth may be slowing.   Continued...