FOREX-Dollar edges higher from 27-month lows as investors await Fed minutes

* U.S. dollar index up 0.1%
* Sterling lower after data shows higher inflation

(New throughout, updates prices, market activity, comments to
U.S. market open; new byline, changes dateline; previous LONDON)
By Saqib Iqbal Ahmed
NEW YORK, Aug 19 (Reuters) - The U.S. dollar crept higher
against a basket of currencies on Wednesday, holding a whisker
above a 27-month low hit in the previous session as investors
awaited the release of minutes from the Federal Reserve's recent
meeting.
The U.S. Federal Reserve's steps to counter the economic
effects of the coronavirus pandemic have helped lift riskier
assets to all-time highs even as it has reduced demand for
safe-havens, battering the U.S. dollar.
The U.S. Dollar Currency Index =USD was 0.1% higher at
92.321. On Tuesday, the index slipped as low as 92.124, its
weakest since May, 2018.
While the dollar was on a somewhat firmer footing on
Wednesday, investors were far from rushing to buy the U.S.
currency.
"The broader motivation for USD selling remains unchanged,"
said Shaun Osborne, chief FX strategist at Scotiabank in
Toronto.
Worries over economic growth as the United States grapples
with the pandemic have weighed on the dollar, analysts said.
A Citigroup economic surprise index, which measures the
difference in economic data relative to estimates, showed the
U.S. recovery .CESIUSD has sidelined in recent weeks while its
European index remained strong .CESIEUR .
Later on Wednesday, investors will get a peek into the U.S.
Federal Reserve's thinking about the state of the U.S. economy
when the minutes of the July 28-29 meeting are released.
"Minutes that sound resoundingly dovish and depict a central
bank ready to ramp up already aggressive stimulus could keep the
dollar biased downward," Joe Manimbo, senior market analyst at
Western Union Business Solutions, said in a note.
Sterling edged lower after data showed British inflation
jumped unexpectedly last month to its highest since March.
The Canadian dollar climbed to its strongest level in nearly
seven months against its U.S. counterpart helped by firmer
appetite for riskier assets after a record run for stocks on
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GRAPHIC: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
The U.S. dollar vs G10 peers https://tmsnrt.rs/3aC2jDn
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