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30/07/24
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USD Flat Before Beginning of Fed Meeting; Traders Wary
On Tuesday, the U.S. dollar generally traded flat, and traders were wary before the beginning of the Federal Reserve’s rate-setting meeting.
The U.S. dollar index, which measures its strength against 6 other major currencies, traded slightly higher at 104.342, trading within a narrow range.
The Fed begins its two-day policy-setting meeting later today and will likely keep rates the same when it ends on Wednesday.
Although it is generally expected the U.S. central bank will keep rates unchanged this week, traders will be watching for any clues from Fed Chair Jerome Powell at his press conference about when policymakers are prepared to reduce rates.
Dovish-leaning comments by Fed officials and soft inflation readings have resulted in markets ramping up bets that the starting point will be in September with a 0.25% cut.
In August, in the absence of a Fed meeting, Fed Chair Jerome Powell will also attend the Jackson Hole gathering of central bankers to guide the market further. Failing to give a clear indication this week of a September cut would likely result in the strengthening of the U.S. dollar and Treasury yields.
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