The U.S. dollar was trading mostly flat against its primary trading partners before the London open on Wednesday as traders waited to hear the outcome of the U.S. Federal Reserves’s two-day policy meeting that will be concluding later today.
The dollar index was unchanged at 97.64 .DXY. the greenback eased modestly against the yen, down 0.06 percent to trade at 108.37 as of 8:43 a.m. GMT. The pound eased 0.03 percent against the dollar to trade at $1.2552, while the euro gained 0.01 percent against the greenback to $1.1192. Analysts expect the Fed to keep interest rates stable after its June policy meeting, but to hint to whether an interest rate will be forthcoming as has been anticipated. Interest rates in the United States haven’t been cut for more than a decade, and U.S. President Donald Trump has long been pushing the Fed to take this step, though the Fed, under the leadership of Jerome Powell, has remained staunch in its convictions that it will make decisions entirely based on the economic picture, not on the whims of the U.S. President.
Oil prices gained for the second consecutive day on Wednesday, buoyed by renewed optimism about trade talks between the U.S. and China in advance of the G-20 summit later this month, as well as renewed expectations for an economic stimulus plan from the European Central Bank. ECB President Mario Draghi announced on Tuesday that the ECB would ease policy if iflation stagnates, a sentiment that is dramatically different than his previous stance.
U.S. WTI futures were up 0.45 percent to $54.14 per barrel on Wednesday morning in London, and Brent crude futures were up 0.51 percent to $62.46 per barrel. Oil prices have recently been under pressure due to concerns that the trade war between the U.S. and China would decrease global demand. Record high production out of the U.S. has also kept prices from rising. Earlier this week President Trump announced that he was sending an additional 1,000 troops to the Middle East after attacks on two oil tankers last week. Trump said that he was prepared to take further military action against Iran if necessary. This increase in tensions also served to prop up oil prices in the past few trading sessions.