US dollar crippled by markets adjusting to FOMC minutes, Russia stays in spotlight

• The dollar index (DXY) was pressured on Wednesday.
• FOMC minutes disappoint vs. the uber hawkish rhetoric of late from Fed officials. 

The index slid to a low of 95.67 when the Federal Open market Committee minutes disappointed investors who had been in anticipation of more hawkish language in the discussions at the January meeting between board members. 

While the Federal Reserve still thinks inflation will come down and that there was no discussion of a 50bp hike, it was unlikely that the minutes would have pointed to the 50bps solution. The minutes were from a meeting held before the release of strong payrolls and the hot Consumer Price Index. Nevertheless, the policymakers are still not set on a particular pace of interest rate hikes and decisions thereof would depend on a meeting-by-meeting analysis of data.

In contrast, voting member and known hawk, St. Louis Fed President James Bullard, reiterated calls for a faster pace of Fed rate hikes. At the Fed's Jan. 25-26 meeting, the board agreed that it would "soon be appropriate" to raise the Fed's benchmark overnight interest rate from its near-zero level, so March remains to be a live meeting. 

As for the geopolitical risks, the United States and NATO are warning that Russia was still building up troops at the border of Ukraine, contradicting Moscow's insistence it was pulling back:

• US State Department: Russian military moving concerningly into fighting positions

A US Senior Administration Official has in recent trade announced that Russia has increased troops near Ukraine by up to 7,000. The stream of disappointing headlines is continuing to sink USD/JPY which now trades at 115.33.