Dollar Holds Steady Ahead of Expected US Rate Hike

The US dollar held steady near its two-week high on Wednesday as market participants bet heavily that the Federal Reserve will hike interest rates, marking the first in a series of increases.

Traders expect the Fed to lift its 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),'

On the other hand, Benjamin Ford, researcher at macro research and strategy firm Macro Hive, expects the Fed decision to be net-negative for the dollar.