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US dollar slips as traders position ahead of Fed decision
The dollar index fell about 0.1% to around 101.40, while markets priced roughly a 40% chance of a 25-basis-point rate hike.
The US dollar eased on Tuesday as traders trimmed exposure ahead of the Federal Reserve policy decision due Wednesday, with the US Dollar Index slipping around 0.1% to trade near 101.40, according to FXStreet.
While the Fed is widely expected to hold the fed funds target range at 3.50% to 3.75%, markets assigned close to a 40% probability to a surprise 25-basis-point increase, with investors watching the policy statement and Fed Chair Kevin Warsh’s press conference for signals on a possible September move.
FXStreet said softer US Consumer Confidence data also weighed on demand for the currency.
In major pair moves, EUR/USD rose about 0.2% to around 1.1390, GBP/USD edged marginally higher near 1.3290, and USD/JPY inched up toward 163.84 as elevated US Treasury yields and expectations of a hawkish Fed stance continued to support the yen’s weakness.
FXStreet also noted USD/JPY remains near multi-decade lows for the yen, leaving Japanese authorities alert to excessive currency moves, while AUD/USD fell about 0.2% to around 0.6975 ahead of upcoming Australian inflation data.
Latest closeEUR/USD 1.139 ▼0.1%|USD/JPY 163.85 ▲0.1%|GBP/USD 1.329 ▼0.5%