Dollar Holds Steady Near Multi-Week Highs Ahead of Fed Rate Decision
By Aboki Forex —
LONDON, Sept. 16. The dollar held steady near multi-week highs on Wednesday as investors awaited the Federal Reserve decision. Traders expect the Fed could begin a series of U.S. rate increases. The decision could have a significant impact on the yen's recent rally.
The dollar strengthened this week. During Asian trading, the yen weakened. Markets are heavily pricing in a rate increase. Investors will be paying particular attention to the Fed's guidance on whether further rate increases are likely.
Fed Guidance In Focus
“Even though a hike is close to being fully priced, we could see some dollar strength (if they raise interest rates),” said Kirstine Kundby-Nielsen, senior FX analyst at Danske Bank.
The rate increase is already largely reflected in market prices. Investors will parse the Fed's guidance for signals on the next move in the dollar.
Euro, Sterling And UK Inflation
The euro remained close to Monday's one-month low. Sterling was watched after UK inflation accelerated. The data came one day before the Bank of England is expected to leave interest rates unchanged.
The dollar index, which measures the U.S. currency against a basket of major currencies, was little changed.