100 threshold: United States Dollar Index faces make-or-break Fed decision
The US Dollar Index (DXY) holds firm near a two-week high on Tuesday as traders prepare for the Federal Reserve’s (Fed) monetary policy decision on Wednesday. At the time of writing, the index trades around 99.66, up 0.17% on the day.
The US Dollar Index (DXY) is holding steady near a two-week high as investors await the Federal Reserve's (Fed) monetary policy decision on Wednesday. The index is currently trading around 99.66, up 0.17% for the day. Nearly all markets are pricing in a 25-basis-point rate hike, with the CME FedWatch Tool giving a 92% probability of such a hike.
Analysts are focusing more on the Fed's updated economic projections and comments from Fed Chairman Kevin Warsh rather than the decision itself. Scotiabank's strategists warn that doubts about follow-through action from the Federal Open Market Committee (FOMC) could undermine the US Dollar. TD Securities predicts that with a 25bp rate hike already priced in, the USD could experience a brief setback if the Fed holds rates steady.
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