Currency – The dollar flounders in view of the Fed


© Reuters. The dollar flounders in view of the Fed

Investing.com – The dollar was little changed against a basket of other major currencies on Tuesday, as investors waited for the outcome of the meeting of the federal Reserve on Wednesday, where he was expected to announce the first rate increase in 2018.

The dollar index, which measures the greenback’s strength against a basket of six major currencies, was 89.47 at 04:11 AM (08:11 GMT).

With a rate increase almost safe, investors will be closely watching indications of the Fed as to whether market conditions can support four rate hikes this year, instead of three as planned in December.

An optimistic assessment of the u.s. economy by the new president of the Fed Jerome Powell at the end of the last month has fuelled expectations of a fourth rate hike.

The dollar was slightly lower against the euro, with EUR / USD rising 0.11% to 1,2349.

The single currency was supported by expectations that the european central Bank will end its stimulus program later this year and will begin to raise its interest rates towards the middle of next year.

The euro was re-launched on Monday after Reuters reported that the decision-makers of the ECB is looking towards the future of interest rates.

The british pound was higher, with GBP / USD rising 0.24% to 1,4056, not far from the highest in the month of 1,4087.

The british pound bounced back on Monday after the United Kingdom and the european Union have agreed on a transitional agreement of 21 months after the Brexit.

The dollar rose against the yen, with USD / JPY advancing 0.34% to 106,45.

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