The minutes from the recent Federal Open Market Committee were not as dovish as some had expected and this seems to have encouraged some profit-taking on short-dollar positions.

The Fed was widely expected to cut inflation and growth forecasts, but the downgrades were not as severe as anticipated. This year's GDP forecast was trimmed to 3.0% to 3.5% from 3.2% to 3.7%.

It's still a three-handle, which will seem downright optimistic to many. Next year's growth forecast was cut to 3.5% to 4% from 3.4% to 4.5%. This year's inflation forecast was cut to 1.0% to 1.1% from 1.2% to 1.5% in April. The unemployment forecast was little changed at 9.2% to 9.5% from 9.1% to 9.5% in April.

While there was some talk of action if needed, the discussion seemed vague with no specific actions proposed and the bar, as we suggested, seems a bit high in so far as it would require an "appreciably worsening" of the outlook.

Bottom line is that the market is responding as if the Fed is unlikely to respond to the modest weakening of the economy. It is not hawkish enough to reverse the negative sentiment toward the dollar and it is not dovish enough to heighten expectations for a resumption of credit easing.

A global leader with close to 200 years of experience, Brown Brothers Harriman helps many of the world's most sophisticated mutual funds, investment managers, banks and insurance companies achieve their international business objectives. BBH provides specialist services and innovative solutions to clients that include a global custody network of close to 100 markets, accounting, administration, securities lending, foreign exchange, cash management and brokerage services. BBH operates a global business through 14 locations, including New York, Boston, New Jersey, Philadelphia, Charlotte, Chicago, Dallas, London, Dublin, Luxembourg, Zurich, Grand Cayman, Hong Kong and Tokyo.

More from Currencies

Bitcoin Today: Prices Continue to Slump Heading Into Weekend

Bitcoin Today: Prices Continue to Slump Heading Into Weekend

Bitcoin Today: Prices Continue Skid Toward $7,000 as DOJ Launches Investigation

Bitcoin Today: Prices Continue Skid Toward $7,000 as DOJ Launches Investigation

Bitcoin Today: Prices Plummet Below $8,000 in Market Downturn

Bitcoin Today: Prices Plummet Below $8,000 in Market Downturn

Bitcoin Today: Prices Slip as Broader Crypto Market Struggles to Make Traction

Bitcoin Today: Prices Slip as Broader Crypto Market Struggles to Make Traction

Bitcoin Today: Prices Attempt to Recover From One-Month Lows

Bitcoin Today: Prices Attempt to Recover From One-Month Lows