FX.co ★ Dollar Steadies Ahead of Fed Decision

The dollar index hovered around 99.5 on Wednesday, following heightened volatility earlier in the week, as investors awaited the Federal Reserve’s latest policy decision. Officials are widely expected to leave interest rates unchanged.

The meeting will also be the first chaired by Kevin Warsh, though he is not expected to submit a “dot” in the FOMC’s quarterly projections, which outline individual policymakers’ interest rate expectations. Market participants are also watching upcoming US retail sales and pending home sales figures for additional insight into the economic outlook.

Earlier this week, the Reserve Bank of Australia held its benchmark interest rate at 4.35%, while the Bank of Japan raised its policy rate by 25 basis points to 1%.

At the same time, investors continued to track developments around the US–Iran peace agreement, scheduled to be signed on Friday. The deal is expected to reopen the Strait of Hormuz and restore oil flows from the Middle East.