Dollar Rally Slows Ahead of Fed Decision

The U.S. dollar's recent rally slowed ahead of the Federal Reserve's key decision on interest rates.

Last week's inflation data showed stubbornly high numbers, and tensions in the Middle East persist, leading markets to widely expect a rate hike.

Fed funds futures indicate a 90% probability of a 25-basis-point increase, with another 25-basis-point hike factored in for December. By the end of next year, the market has already priced in around 95 basis points of cumulative rate hikes.

A single rate hike is unlikely to stir markets significantly, but an update on the dot plot and economic projections could become a focal point.