Forex – Dollar Stays Up While Attention Shifts to Fed Meeting
The dollar stayed strong in morning trade in Asia Wednesday ahead of a policy meeting at the U.S. Federal Reserve expected to shed some light on how many times interest rates may go up this year.
The dollar continued to gain against Asian currencies.
The USD/JPY pair jumped 0.28% to 110.68, the highest since May 23. As a safe-haven currency, the yen often rises in times political tensions and market turmoil.
The USD/CNY pair rose to CNY6.4055. The People’s Bank of China set the yuan’s reference rate, the mid-point from which the currency is allowed to trade, at 6.4156 versus yesterday’s fix of 6.4121.
The USD/AUD pair inched up to 1.3214, or 0.08% higher, as the Aussie dollar is on the defensive ahead of Reserve Bank of Australia Governor Philip Lowe’s speech today at an Australian Industry Group event in Melbourne.
The greenback continued along the upward trajectory that started Tuesday after the meeting between U.S. President Donald Trump and North Korean leader Kim Jong Un. The U.S. dollar index that tracks the greenback against a basket of six major currencies, rose 0.06% to 93.90 by 12:00AM ET (04:00 GMT).
Investors have shifted their focus to the two-day Federal Open Market Committee (FOMC) meeting that starts Wednesday. The Fed is widely expected to raise interest rates for the second time this year and markets are waiting to see if there will be a third and a fourth hike in 2018.
Forex – Dollar, Euro Steady in Rangebound Trade Ahead of Fed, ECB
The dollar and the euro were little changed in rangebound trade on Wednesday as traders awaited a Federal Reserve policy announcement later in the day and looked ahead to Thursday’s European Central Bank meeting.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was trading at 93.88 by 03:46 AM ET (07:46 AM GMT), little changed for the day after rising 0.29%.
The Fed is widely expected to raise interest rates for the second time this year at the conclusion of its policy setting meeting later in the day.
The euro was almost unchanged against the dollar, with EUR/USD last at 1.1746.
The euro rose to three week highs against the dollar last week after hawkish ECB comments fueled speculation that the bank could signal its intention to start unwinding its bond purchasing program.
The euro subsequently gave back those gains amid concerns that those expectations were overdone.
The pound was a touch lower against the U.S. currency, with GBP/USD sliding 0.16% to 1.3350 ahead of the latest UK inflation report later Wednesday which was expected to show that consumer prices ticked up from a one year low last month.
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