Forex News – Fed policy meeting minutes leave door open to further QE

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The dollar eased after the FOMC April policy meeting minutes were released on Wednesday.

The report shows that several Federal Reserve policy makers were in favour of more stimulus measures to support the U.S. economy if the recovery slows down. This leaves the door open for more QE (quantitative easing) which is usually negative for the dollar.

While half of the FOMC committee members saw risks to the growth outlook as broadly balanced, nearly all the rest saw dark clouds on the horizon, both within the U.S. and globally.

“Participants identified several downside risks to the projected pace of economic expansion, including the fiscal and financial strains in the euro area and the possibility of an abrupt fiscal consolidation in the United States,” the minutes said.

Some Fed policy makers, including Fed Chairman Ben Bernanke, have expressed concern over the U.S. economy .

Several members of the FOMC  “indicated that additional monetary policy accommodation could be necessary if the economic recovery lost momentum or the downside risks to the forecast became great enough,” according to the April meeting minutes.