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The U.S. dollar slipped against major peers on Wednesday as a \u200bselloff in Treasuries eased, with investors counting on minutes from the Federal Reserve\u2019s latest policy meeting to \u200coffer fresh guidance later in the day.<\/strong><\/p>\n A light data calendar this week has left markets hungry for catalysts, potentially putting greater emphasis on the minutes.<\/span><\/p>\n The document is expected to offer a comprehensive read on policymakers\u2019 thinking at a time when Fed Chair Kevin Warsh has been reticent on the rate \u200boutlook and renewed Middle East tensions are adding to the unease.<\/span><\/p>\n The euro rose 0.31% to $1.1611, remaining close to the two-month high \u200btouched earlier this week. Sterling was 0.22% higher at $1.3562 after data showed UK inflation in July rose \u2060in line with expectations.<\/span><\/p>\n The Japanese yen also strengthened 0.35% to 159.04 per dollar, pulling away from the closely watched 160 level after \u200bgiving back much of its intervention gains.<\/span><\/p>\n \u201cJapan is struggling with structural problems. But I think the central banks have a strong incentive \u200bto keep the yen orderly,\u201d Tom Samuelson, chief investment officer at Vineyard Global Advisors, said.<\/span><\/p>\n The dollar index , which measures the U.S. currency against six major peers, was down 0.29% at 99.36.<\/span><\/p>\n A selloff in U.S. Treasuries appeared to be easing. The yield on the benchmark U.S. 10-year Treasury note declined to \u200b4.696%, while that on the 30-year bond dipped to 5.283% after hitting its highest level in nearly 20 years.<\/span><\/p>\n But some cautioned \u200bagainst complacency, warning that yields were still elevated and an increase could reverberate across stocks, bonds and currency markets. Samuelson said a 4.8%-5% 10-year \u200cTreasury yield \u2060would mark the \u201cwarning track.\u201d<\/span><\/p>\n \u201cIf we push through 4.8% to 5% on the 10-year Treasury, it can cause jitters and compress valuations of high-flying technology stocks,\u201d he added.<\/span><\/p>\n The Fed minutes are set to be released at 2 p.m. Eastern Time (1800 GMT) on Wednesday.<\/span><\/p>\n Data released during recent weeks pointed to a softer U.S. economy, including unexpected job losses in July and mild \u200binflation readings, leading investors to scale \u200bback rate-hike bets.<\/span><\/p>\n \u201cIf the \u2060Fed does not follow through with the rate hikes that are being discounted, the upside for bond yields should be very limited here,\u201d Harvinder Kalirai, chief global fixed income and currency strategist at \u200bAlpine Macro, said in a client webcast.<\/span><\/p>\n \u201cThe labour market and inflation surprise are rolling over \u200band usually that \u2060coincides with a narrowing in the dollar\u2019s yield advantage, and that feeds through into a softer dollar.\u201d<\/span><\/p>\n Meanwhile, a stalemate in the Middle East lifted oil prices to nearly three-week highs, keeping the inflation risk alive.<\/span><\/p>\n U.S. President Donald Trump said on Tuesday there were no talks with Iran \u2060and that \u200bthe Strait of Hormuz was open. Iran said the strait remained shut to \u200bshipping.<\/span><\/p>\nMIDDLE EAST IMPASSE KEEPS INFLATION RISK ALIVE<\/strong><\/h2>\n