Wednesday, the dollar index, which tracks the currency against its six major rivals, edged down 0.1% to 96.930.DXY. The dollar slipped against the safe-haven yen by dropping 0.1% lower to 109.98 JPY=, on the other hand, the euro added 0.1% to $1.1217 EUR=. In addition to these events regarding the dollar, investors are also waiting for an expected United States rate hike later in the day (Wednesday) for signs on Federal Reserve policy for the rest of the year.
In accordance to this, the Federal Reserve is scheduled to declare its monetary policy decision at 1800 GMT on Wednesday at the end of a two-day policy meeting, which was followed by a press conference which was led by United States Federal Reserve Chair: Janet Yellen. The Fed may also provide more clues about its plans on how to reduce its holdings of more than $4 trillion in Treasuries and mortgage-backed securities.
With regards to the Federal Reserve meeting, chief investment officer at the private client group of U.S. Bank in Helena, Montanna, who spoke for Minneapolis: Bill Northley, said that it is certainly going to chart the course for a lot, including the strength of the dollar. He also added that there is some risk that they (Federal Reserve) could see a more dovish outlook.
In relevance to this, on Tuesday, Federal Reserve funds futures suggested that traders saw about 29% chance of rates rising to 1.25% to 1.50% at the Federal Reserve’s September 19-20 meeting, and a 57% chance of such move at its December 12-13 meeting.