FX.co ★ Dollar Holds Steady Ahead of Fed Decision

The dollar index hovered around 98.7 on Wednesday, maintaining slight losses from earlier in the week as investors anticipated the upcoming Federal Reserve policy announcement. The Fed is widely expected to implement a quarter-point rate cut. Market participants will pay close attention to any indications from Chair Jerome Powell regarding the pace of future rate reductions, with a December cut already anticipated. In addition, investors were focused on the pivotal meeting between US President Donald Trump and Chinese President Xi Jinping, which is expected to establish a framework potentially halting increased US tariffs and China’s rare earth export restrictions. Concurrently, the dollar experienced further losses against the yen following discussions between Treasury Secretary Scott Bessent and Japan’s Finance Minister Satsuki Katayama. Their meeting addressed foreign exchange volatility, with Bessent advocating for "sound monetary policy," a remark perceived as a subtle critique of Japan's gradual approach to rate normalization.