Dollar buoyed by bets on US rate hikes

The United States dollar has been trading near multi-week highs as investors wait for the Federal Reserve's decision on interest rates. Analysts expect the first of several possible U.S. rate hikes, with a 25 basis point increase widely priced into the dollar. However, there is a small chance that the dollar could weaken if the Fed raises rates but Chair Kevin Warsh downplays the likelihood of additional hikes in his press conference.

If the Fed does not raise rates, the dollar could fall by 1% or more. The dollar has advanced against other currencies, such as the yen and New Zealand dollar, and against the euro, which is nearing a one-month low. The Australian dollar is steady, while the South Korean won and Chinese yuan have also shown significant movements against the dollar due to capital repatriation and fiscal expansion.