Asian shares edged higher, while the U.S. dollar remained near one-year lows against the sterling and euro on Thursday, following the release of Federal Reserve minutes indicating policymakers' readiness to begin cutting U.S. interest rates.

According to the minutes, the "vast majority" of officials believed a rate cut in September would be appropriate if data met expectations. This led to a rise in U.S. stocks, a rally in bonds, and a decline in the dollar.

MSCI's broadest index of Asia-Pacific shares outside Japan increased by 0.2% in early trading, and Japan's Nikkei climbed 1%. Meanwhile, Hong Kong's Hang Seng index rose 0.7%.

The euro was trading at $1.1151, having reached as high as $1.1173 overnight—its highest level since mid-2023—breaking above resistance at $1.1139 and clearing the path towards the 2022 high of around $1.1276. Sterling was at $1.3096, after hitting a more than one-year high of $1.3119 overnight.

"The clear signal from the Fed minutes has driven the recent downturn in the U.S. dollar," said Ray Attrill, head of currency strategy at National Australia Bank (OTC).

"It’s likely that the move above $1.30 for the pound is sustainable, and similarly for the euro...we could see a range of $1.10 to $1.15 in the coming weeks," he added.

Potential checks on the dollar’s decline could come from U.S. jobs data on September 6 or from the purchasing managers' index (PMI) data due later today, particularly if it challenges market expectations for rate cuts or highlights economic weakness in Europe, affecting the euro.

Japan's flash manufacturing PMI survey showed a slight contraction in activity, while services expanded.

Interest rate futures markets have fully priced in a 25 basis point rate cut in the U.S. next month, with a one-third chance of a 50 basis point cut and over 200 basis points of cuts by July 2025.

Treasuries rallied following the Fed minutes and a significant—though expected—downward preliminary revision to U.S. hiring numbers over the past year.

Ten-year yields were largely stable at 3.81% on Thursday in Asia, while two-year yields held at 3.94%.

U.S. and European equity futures were mostly flat, and the commodities market reflected a cautious tone.

Brent crude futures have fallen nearly 6% so far in August, trading at $76.04 per barrel, and are approaching yearly lows due to rising U.S. crude inventories and a bleak demand outlook in China.

"Soft landings are rare, and the first 200 days after the initial rate cut tend to be challenging for equities, as it often signals a deteriorating growth and profit environment," said Nick Ferres, CIO at Vantage Point Asset Management in Singapore.

The weak dollar kept gold above $2,500 per ounce. Shares in Australian miner Whitehaven Coal surged 8% after announcing the sale of a $1 billion stake in its Blackwater mine in Queensland to Japanese steelmakers.

South Korea's central bank left interest rates unchanged as expected, but it is preparing for potential cuts by lowering its growth and inflation forecasts.

Paraphrasing text from "Reuters" all rights reserved by the original author.