DXY: The USD kept its weekly rise ahead of the Fed's decision
The dollar edged higher in early European trading on Wednesday, heading for its biggest monthly gain since September, while the euro edged lower after weak inflation data.
At 04:45 ET (09:45 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.1% higher at 103.352, on track for more than a gain. 2% this month.
Dollar demand has been buoyant this month as traders trimmed expectations for when the Federal Reserve will start cutting interest rates due to strong U.S. economic data and reaction from central banks. naughty.
The greenback was also supported by escalating geopolitical tensions in the Middle East, which have weighed on risk sentiment amid fears of a broader regional conflict.
The US central bank is expected to leave interest rates unchanged, and so the focus will likely be on Fed Chairman Jerome Powell's post-meeting press conference to see if he will signal a cut.
Analysts at ING said: “With US data releases - most recently December JOLTS data showing expanding employment opportunities - there appears to be little reason for the FOMC announcement tonight prompted the market to price in well above the current 130 basis point rate cut this year.” in a note. “This would be a neutral/positive development for the USD.”
There's more labor data to study on Wednesday, in the form of ADP Private Payrolls for January, ahead of weekly initial jobless claims on Thursday and then broad data on Friday. - viewed monthly salary reports.
At 04:45 ET (09:45 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.1% higher at 103.352, on track for more than a gain. 2% this month.
Dollar demand has been buoyant this month as traders trimmed expectations for when the Federal Reserve will start cutting interest rates due to strong U.S. economic data and reaction from central banks. naughty.
The greenback was also supported by escalating geopolitical tensions in the Middle East, which have weighed on risk sentiment amid fears of a broader regional conflict.
The US central bank is expected to leave interest rates unchanged, and so the focus will likely be on Fed Chairman Jerome Powell's post-meeting press conference to see if he will signal a cut.
Analysts at ING said: “With US data releases - most recently December JOLTS data showing expanding employment opportunities - there appears to be little reason for the FOMC announcement tonight prompted the market to price in well above the current 130 basis point rate cut this year.” in a note. “This would be a neutral/positive development for the USD.”
There's more labor data to study on Wednesday, in the form of ADP Private Payrolls for January, ahead of weekly initial jobless claims on Thursday and then broad data on Friday. - viewed monthly salary reports.
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