The U.S. Dollar Index, a gauge that investors use to measure the Dollar’s worth relative to its major rivals, rose in European trading, recovering some of yesterday’s losses, as investors speculate that the Federal Reserve will maintain the status quo on its policy outlook. The Fed will release its decision later today, and expectations are high that the Fed will continue to take a wait-and-see approach to an interest rate hike, reiterating their stance that the US economy is on a growth path.
As reported at 8:56 am (GMT) in London, the U.S. Dollar Index was trading at 94.27 .DXY, a gain of 0.3%, but still far off the recently struck 11-year peak at 95.481 .DX. The EUR/USD was lower at $1.1340, slipping from Tuesday’s high at $1.1423, but still off the 11-year trough hit on Monday at $1.1098. The USD/JPY was up nearly 0.2% to trade at 118.05 Yen, but off from last week’s peak when the pair hit 118.80 Yen.
FX Traders Eye Fed Tone
Still, some FX players are wary that the recent fall in oil prices, specifically, and commodities in general, could result in a more cautious Fed, with rate hike expectations then pushed back. Some analysts believe that the key will be the Fed’s language in the policy decision; if the central bank is negative on any aspect of the US economy then that would certainly weigh on the greenback.