Dollar Edges Lower Ahead of Expected Fed Interest Rate Hike

The US dollar retreated from its multi-week high on Wednesday as oil prices stabilized and ahead of a highly anticipated Federal Reserve decision.

Markets expect the Fed to raise interest rates by 0.25 percentage points, bringing them to a 3.75-4.00% range.

Kirstine Kundby-Nielsen, senior FX analyst at Danske Bank, said even though the hike is 'close to being fully priced,' they could still see some dollar strength if interest rates are raised.

The euro and sterling also traded lower against the dollar, with the euro reaching a one-month low of $1.1523 on Monday.