Dollar Retreats Ahead of Anticipated Fed Hike

The dollar retreated slightly from its near multi-week highs on Wednesday as oil prices plateaued and ahead of an anticipated Federal Reserve interest rate hike.

The greenback has been rising in tandem with bond yields and energy prices this week, with the largest gains against the yen and New Zealand dollar. The yen touched a one-week low of 155.49 per dollar during the Asian session.

Markets are pricing in a high likelihood that Fed policymakers will raise their benchmark rate by a quarter percentage point to a range of 3.75%-4.00% and signal further tightening ahead, Kirstine Kundby-Nielsen, senior FX analyst at Danske Bank, said.