The dollar advanced against every major currency in early North American trading, with its smallest gain against the euro. The moves come a day ahead of a Federal Reserve rate decision that is widely expected to raise rates by 25 basis points.
The US dollar is higher against all the major currencies in early North American trading. Its smallest gain is against the euro, at +0.06%. Since EURUSD is quoted with the euro as the base currency, a fall in the pair reflects the dollar's broader strength.
The gains come ahead of tomorrow's Federal Reserve decision. The Fed is widely expected to raise rates by 25 basis points, lifting the target range to 3.75%–4.00% — the first Fed rate hike since July 2023.
The decision will be released at 2:00 PM ET on Wednesday, followed by Fed Chair Kevin Warsh's press conference at 2:30 PM ET. The meeting will also include updated economic projections and a new dot plot. Traders are looking beyond the expected hike for clues on whether it marks a one-time adjustment or the start of a broader tightening cycle.
Treasury yields are moving higher alongside the dollar, with the 10-year yield reaching 5.004%, up 4.3 basis points. The move puts the benchmark back above the psychologically important 5.00% level, which is helping support the dollar.
The steeper move at the long end of the curve also reflects growing concern over the longer-term inflation outlook. Oil prices remain above $100, adding to that pressure.
Source: Investinglive
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