There were no big surprises from the Federal Reserve on Wednesday as minutes from the central bank's recent rate setting meeting underlined economists' expectations of one further rate increase this year.
Members of the Federal Open Market Committee (FOMC) set a hawkish tone at the June meeting, most agreeing that the recent fall in inflation was likely "transitory", and that economic activity pointed to further rises in consumption and consumer prices.
Doves concerned over inflation
A slightly dovish undertone was present in the minutes, however, as FOMC members reached no agreement on trimming the balance sheet.
Some of the more dovish members also voiced concerns that progress towards the Fed's 2% inflation target rate might have slowed and that low prices could persist.
But, believing that inflation will return to its 2% target rate over the medium term, the Fed funds rate was increased in June by a quarter point to a range between 1% and 1.25%. The Fed funds rate has been lifted four times since December 2015.
"The Federal Reserve is striding determinedly along its hiking path and continues to signal more rather than less tightening to come," said Steen Jakobsen, chief economist at Saxo Bank.
Timing of next rate rise unclear
While most analysts have suggested the most likely timing of the next rate increase will be September, markets in the past couple of weeks have told a more mixed-up story.
Fed funds futures are monthly contracts that are settled at a price where the Fed funds rate is in the month of expiry. They currently indicate March as the most likely timing of the next rate increase.
Meanwhile, the dollar, which is supported by higher interest rates, has been broadly on the decline since the beginning of the year. The dollar index, measured against a basket of the greenback's rivals, is down 6% on the year.
Since the beginning of July, however, the dollar has gained 0.7%, and it was up a further 0.2% in the immediate aftermath of the Fed minutes.
But the general hawkish message from the Fed remained: "The Committee expects that economic conditions will evolve in a manner that will warrant gradual increases in the federal funds rate."
Christopher Vecchio, senior currency strategist at DailyFX, said: "An injection of hawkish commentary from the FOMC minutes could be enough fuel to allow the US dollar's short-term rebound to gather pace."
There were few clues, however, as to when the Fed planned to start reducing its balance sheet which, after many months of asset purchases under its quantitative easing scheme, stands at $4.5tn.