Dollar Awaits Federal Reserve’s Latest Policy Meeting

Dollar Awaits Federal Reserve’s Latest Policy Meeting

On Wednesday, the Greenback settled higher and traded near to one-week highs vs. a basket of major currencies, as traders awaited the minutes of the U.S. Federal Reserve’s latest policy meeting for further clues on the outlook for interest rates. The U.S. dollar remained backed against its major rivals despite sustained U.S. deficit worries. 

  • The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up by 0.16% at 89.78

The Single currency fell slightly by 0.06%, to settle at $1.2330 retreating further from Friday’s three year high of $1.2554, as markets await the U.S. Federal Reserve’s latest policy meeting. Earlier data showed that the Private sector output in Germany eased slightly in February, but maintained strong growth momentum.

The Sterling pound fell by 0.22%, to settle at $1.3965. On the release front, traders are awaiting BOE's Carney speech due later in the day.

Against the JPY, the Greenback rose by 0.18%, to settle at ¥107.52, extending its bounce from Friday’s 15-month declines of ¥105.55.

Early on Wednesday, Gold prices declined to about one-week lows, as the US dollar recovered, despite caution ahead of the minutes of the Federal Reserve's latest meeting. The Precious metal is very sensitive to rising rates, which increase the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar, in which it is priced.Gold Futures - Apr 18 (GCJ8), fell by 0.03%, to settle at $1,330.80.

Crude oil prices declined dramatically, negatively affected by the Greenback's recent rebound and as market players grew more cautious ahead of this week's U.S. supply data. Crude Oil WTI Futures - Mar 18 (CLH8) fell as much as 1.13%, to settle at $61.09, and Brent Oil Futures - Apr 18 (LCOJ8) was down by 1.01% at $64.59.

The most important economic events:

  • GBP BOE's Carney, Broadbent, Haldane and Tenreyro Speak in London: (GMT 14:15) – Important.
  • USD FOMC Meeting Minutes (31 JAN): (GMT 19:00) – Important.

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