By Barbara Kollmeyer, MarketWatch

The U.S. dollar traded flat on Wednesday, ahead of minutes from the latest Federal Open Market Committee meeting, which could offer clues on the central bank's thinking on interest rates.

Meanwhile, the British pound pushed higher after an update on employment and wages for the U.K.

The ICE U.S. Dollar Index , which measures the greenback against a basket of six currencies, was last trading at 93.919, a gain of 0.08%. The dollar strengthened Tuesday, boosted by upbeat retail sales, which cast the economy in a favorable light.

Against the yen, the dollar rose to Yen110.88 on Wednesday, up from Yen110.68 on Tuesday. The euro was slightly lower against the dollar, changing hands at $1.1726, compared with $1.1736 in late trading on Tuesday, after Reuters reported (https://uk.reuters.com/article/uk-ecb-policy-draghi-idUKKCN1AW0LL) that European Central Bank President Mario Draghi won't deliver a fresh policy message at the Fed's Jackson Hole conference next week.

U.S. data on the way for Wednesday include housing starts and building permits for July at 8:30 a.m. Eastern Time. Minutes for the Fed meeting on July 25-26 will be released at 2 p.m. Eastern.

"Today's Fed minutes may offer clues on the start of shrinking the $4.5 trillion asset portfolio. This should gradually send the longer end of the yield curve higher, but given that the news is already priced in, the impact on the dollar will be limited," said FXTM's chief market strategist, Hussein Sayed, in a note to clients.

He said investors should be watching closely, though, as to what the Fed says about inflation, and whether recent weakness in consumer prices and personal spending is transitory or cyclical, and if markets should be concerned. "The dollar will take its direction based on how hawkish or dovish the Fed is on the inflation front," he added.

In addition, Sayed said news of another executive leaving U.S. President Trump's Manufacturing Jobs Initiative -- AFL-CIO chief Richard Trumka (http://www.marketwatch.com/story/afl-cio-leader-quits-trumps-manufacturing-council-in-disgust-2017-08-15) who resigned Tuesday over the president's response to attacks at a white nationalist rally in Charlottesville -- is contributing to political instability. He said any dollar rally will struggle against a backdrop of unsteady politics.

Read:Trump rips 'alt-left' as he again blames both sides for Charlottesville violence (http://www.marketwatch.com/story/trump-rips-alt-left-as-he-again-blames-both-sides-for-charlottesville-violence-2017-08-15)

Pound rises after jobs data: The pound moved up to $1.2892 after data showed the U.K. June unemployment rate fell to 4.4% from the 4.5% expected by some economists and analysts. The pound was trading at $1.2854 just ahead of that data. Meanwhile, June wages rose 2.1%, including bonuses, versus an estimate of 1.8%.

Still, the data "confirm there is no immediate need for the Bank of England to sanction tighter monetary policy. Simply put, the pay gains are strong but the policy members would still need to be cautious," said Naeem Aslam, chief market analyst at Think Markets U.K., in a note to clients.

Sterling came under pressure Tuesday after U.K. inflation came in softer than expected, which firmed up beliefs by some that the Bank of England may keep interest rates on hold this year.

(END) Dow Jones Newswires

August 16, 2017 05:06 ET (09:06 GMT)