Dollar Holds Gains Ahead of Fed Decision Amid Expectations of Multiple Hikes

The US dollar is holding onto its recent gains ahead of a Federal Reserve decision that's expected to bring the first of several interest rate hikes. Currency strategists believe a 25-basis-point increase is about 90% priced in, which would give the dollar a modest boost.

Currency markets have been relatively stable despite rising global bond yields, but the dollar has gained traction in recent sessions due to expectations that the Fed will need to hike rates multiple times to tackle inflation fueled by the war with Iran and energy price surges.

The exceptions to this stability are mostly in Asia, where the yen is experiencing a promising rally on a combination of hawkish interest rate shifts, joint intervention by Japan and the US, and talk of Japanese investors repatriating capital.