Wednesday, March 16, 2016

Forex - Dollar pushes higher ahead of Fed meeting

Investing.com - Investing.com - The dollar gained ground against a basket of the other major currencies on Wednesday as investors looked ahead to the outcome of the Federal Reserve's latest policy meeting later in the day.

The U.S. dollar index, which measures the greenback's strength against a trade-weighted basket of six major currencies, was up 0.29% at 96.94.

The euro weakened, with EUR/USD down 0.25% to 1.1080.

Most investors were expecting the Fed to hold interest rates steady at the conclusion of its two-day meeting later Wednesday, given recent signs of weakness in the global economy.

But the U.S. central bank was likely to signal that rates will rise fairly soon as long as U.S. inflation and jobs continue to strengthen.

Most economists are currently expecting the first rate hike of this year in June after the Fed raised interest rates for the first time in almost a decade in December.

Higher interest rates would make the dollar more attractive to yield seeking investors.

Fed Chair Janet Yellen's post policy meeting news conference will be closely watched for clues about interest rates' future path.

The dollar also pushed higher against the yen, with USD/JPY advancing 0.52% to 133.73.

The Bank of Japan kept monetary policy on hold at the outcome of its meeting on Tuesday, even as it flagged weakness in exports and output due to slowing growth in emerging economies.

The pound was also lower as uncertainty over the outcome of a looming referendum on Britain's future in the European Union continued to weigh.

GBP/USD was down 0.25% at 1.4111, the lowest level in almost two weeks.

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