The US dollar was perched near a one-month high on Wednesday, buoyed by safe-haven flows after hostilities flared anew in the Middle East, while traders awaited a key Federal Reserve interest rate decision later in the day.
Federal Reserve Decision
Moves in currencies were largely subdued in early Asian trade as investors stayed on the sidelines ahead of the Federal Open Market Committee’s decision, with markets pricing in a 33% chance of a 25-basis-point hike.
Persistent strength in the dollar left the euro languishing near a one-month low at $1.1386, having fallen 0.3% for the month thus far, while sterling was down 0.06% at $1.3282, near its weakest level since July 1.
According to Fabien Yip, a market analyst at IG, the Fed will need more indication on how long the inflation risk is going to play out, and thus expects the Fed to keep interest rates on hold later on Wednesday.
The dollar was firm at 101.43 against its peers and rose a touch against the yen to 163.88, keeping pressure on the weakened Japanese currency which continues to struggle at 40-year lows.
Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.
