The dollar remains stable as Fed meeting minutes align with expectations.

On Wednesday, the dollar index decreased due to the release of Federal Reserve minutes from their January meeting, which revealed that most policymakers were concerned about the potential risks of reducing interest rates prematurely.

Officials have cautioned that traders should wait for more evidence of declining inflation before expecting the Fed to begin cutting rates in June.

The meeting minutes stated that participants emphasized the ambiguity surrounding the duration required for a restrictive monetary policy stance to achieve the Fed's 2% inflation target.

Vassili Serebriakov, an FX strategist at UBS in New York, stated that the overall message is that they are monitoring the progress but not quite there.

The possibility of the Fed holding rates higher for longer or making further hikes has increased due to higher than expected consumer and producer price inflation last week.

The greenback has fallen over the past week due to some signs of weakness in retail sales numbers and other data.

Bipan Rai, North American head of FX strategy at CIBC Capital Markets in Toronto, stated that the dollar is facing some pressure due to the uncertainty surrounding incoming data. He emphasized that this is a data-driven environment.

The upcoming Fed rate decisions will be complicated by the inflation data, according to Richmond Fed President Thomas Barkin, who stated this on Wednesday.

On the day, the dollar index dropped 0.04% to 104.00, after reaching its lowest point since February 2nd at 103.79 on Tuesday.

The greenback rose 0.13% to 150.19 yen while the euro gained 0.1% to $1.0815.

Carry trades are still popular among traders as the anticipated timing of rate cuts is delayed, resulting in low-yielding currencies like the yen underperforming.

If equities remain stable or rise, it indicates a positive risk sentiment, which supports carry trades in FX, according to him.

In January, Britain recorded its highest monthly budget surplus, and as a result, Sterling increased by 0.11% to $1.2632.

Kathleen Brooks, research director XTB, stated that the "record" surplus does not necessarily mean that the UK is generating cash significantly faster than before, as the surplus was lower than expected.

The BOE is unlikely to cut rates based on today's data, as economic growth is predicted to remain slow.