2018.02.2202:29:00UTC+00Dollar Held Firm after Fed Minutes

The dollar climbed to a one-week high versus a basket of major currencies on Thursday, after minutes of the Federal Reserve's January meeting showed policymakers were more confident of the need to keep hiking interest rates.

The greenback held onto most of its overnight gains courtesy of higher Treasury yields, though the sudden shift to safety also spurred demand for the Japanese yen.

A more upbeat take on inflation in the minutes of the Fed's Jan. 30-31 policy meeting supported expectations for rate hikes. U.S. short-term interest-rate futures continued to reflect strong expectations that the Fed will hike rates three times this year.

The minutes also showed that voting members as well as the wider group of policymakers had improved their forecasts for the economic outlook since December.

Investors are narrowing the odds on quicker hikes with a host of Fed fund futures notching contract lows. Three rate hikes are now almost fully priced in for this year, compared to two as recently as December.

The dollar index climbed to 90.123. Earlier, it rose to 90.166, the highest level since Feb. 13. That lifted it about 2.2 percent from a three-year low near 88.25 slumped last week.

The euro slipped to $1.2274, from a $1.2359 peak on Wednesday and looked in danger of testing its February trough at $1.2204.

The next hurdle will be minutes from the European Central Bank's last meeting with markets wary in case there is more talk of an eventual winding back on stimulus.

The dollar fared less well on the yen as the Japanese currency caught a safe-haven bid, falling back to 107.32 from an early 107.68.

The euro fell to its lowest on the yen in three months at 131.57 and risked cracking major support at its 200-day moving average of 131.12.