Dollar Holds Steady as Markets Eye Upcoming Policy Decisions

The US dollar has held its seven-week high, but currency markets are looking beyond this week's Federal Reserve rate hike to other key policy decisions in London and Tokyo.

The greenback's advance was capped at 0.7% on Wednesday after the Fed voted unanimously to lift its benchmark policy rate by 25 basis points to 3.75%-4.00%, marking its first rate hike in three years.

Despite this increase, markets remain focused on impending decisions from the Bank of England and the Bank of Japan, with the yen outperforming other major currencies as traders build bets for a landmark policy shift from Tokyo.