U.S. dollar rallies ahead of Fed rate desicion

World
Europe

The U.S. dollar rebounded slightly in late trading on Tuesday, as investors remained cautious about how the Federal Reserve would shape its interest rate policy during a two-day meeting which started on Tuesday.

The market has widely anticipated U.S. central bank's fourth rate hike this year. However, analysts expect that the Fed's pace for rate hikes next year will slow down.

Some even uttered a more negative voice that the three years of steady rate hikes will likely come to an end after Fed's policy meeting on Wednesday.

The Fed started to raise its benchmark overnight lending rate from near zero to over two percent since December 2015, and then gradually raised it to a range between 2.25 and 2.5 present to date.

Adding to market volatility, U.S. President Donald Trump has repeatedly chided the Fed over its monetary policy, imposing pressure on its rate hike decisions this year.

In his latest reference to the Fed, he warned the institution not to make "yet another mistake."

"Don't let the market become any more illiquid than it already is. Stop with the 50 B's. Feel the market, don't just go by meaningless numbers. Good luck!" he said on Twitter on Tuesday.

In late New York trading, the euro rose to 1.1355 U.S. dollars from 1.1350 U.S. dollars in the previous session, and the British pound rose to 1.2638 U.S. dollars from 1.2629 U.S. dollars in the previous session. The Australian dollar fell to 0.7171 U.S. dollar from 0.7177 U.S. dollar.

The U.S. dollar bought 112.53 Japanese yen, lower than 112.75 Japanese yen of the previous session. The U.S. dollar increased to 0.9928 Swiss francs from 0.9925 Swiss francs, and it was up to 1.3492 Canadian dollars from 1.3408 Canadian dollars.

Source(s): Xinhua News Agency