Dollar Holds Firm Ahead of Fed Rate Hike Decision
The US dollar has remained steady near a two-week high on Wednesday as markets await the Federal Reserve's decision, which is expected to mark the first in a series of interest rate hikes.
Market participants are betting heavily that Fed policymakers will lift their benchmark rate by a quarter of a percentage point, to a 3.75%-4% range, and signal further tightening ahead.
Kirstine Kundby-Nielsen, senior FX analyst at Danske Bank, said 'even though a hike is close to being fully priced, we could see some dollar strength (if they raise interest rates)'. However, Benjamin Ford, researcher at Macro Hive, expects the Fed decision to be net-negative for the dollar.
The euro and sterling were down 0.1% and 0.2%, respectively, with the dollar index up 0.1% at 99.71 near its two-week high of 99.865.