The U.S. dollar rises modestly against major currencies ahead of the Federal Reserve’s first policy decision under new chair Kevin Warsh, with traders expecting potential volatility as markets adjust to the Fed’s approach and messaging. On Wednesday, the euro falls about 0.16% to around $1.159, and the British pound dips roughly 0.15% to about $1.34, while the dollar gains a small “safe-haven” boost. The move is linked to remarks by U.S. President Donald Trump indicating that a memorandum of understanding on Iran is not final and suggesting military action could resume if the situation does not meet his expectations. However, investors largely hold back on larger positioning because the main catalyst is the upcoming Fed meeting. The Fed is widely expected to keep policy unchanged at Warsh’s debut session, but market participants will scrutinize the policy statement, economic projections, and Warsh’s news conference for any signs that the Fed is moving away from an easing bias. The focus is on whether officials are becoming more hawkish due to inflation risks.
Dollar edges higher ahead of Kevin Warsh’s first Fed policy decision
The U.S. dollar rises modestly against major currencies ahead of the Federal Reserve’s first policy decision under new chair Kevin Warsh, with traders expecting potential volatility as markets adjust...
- The dollar edges higher against major peers ahead of Kevin Warsh’s first Fed policy decision.
- The euro is about 0.16% lower near $1.159, and the pound is down about 0.15% near $1.34.
- Investors cite Warsh’s first meeting as the main near-term catalyst, with expectations of potential volatility.
- The Fed is widely expected to keep policy unchanged at the meeting.
- Market participants watch for signals that the Fed could shift from an easing bias amid concerns about inflation risks.
The dollar inched higher against most major peers on Wednesday ahead of the Federal Reserve's first policy decision under chair Kevin Warsh, which could see some volatility as investors adjust to a new style of policy making and communication. The euro was down 0.16 percent on the day at $1.1591, while the pound shed 0.15 percent to $1.34, as the dollar took a small safe haven boost from remarks by U.S. President Donald Trump that the memorandum of understanding on Iran was not final, and that he could resume a bombing campaign if he did not like it. But the big event of the day, the Fed meeting, is still to come, and left investors hesitant to take on large positions. The Fed is widely expected to stand pat at Warsh's debut meeting. The statement, economic projections and news conference, however, will be scrutinised for any signals of the Fed dropping its easing bias as officials grow more hawkish on inflation risks. "There have been many central banks meeting this month, but this is the one that's overshadowing everything," said Jane Foley, head of FX strategy at Rabobank.
2 months agoThe dollar inched higher against most major peers on Wednesday ahead of the Federal Reserve's first policy decision under chair Kevin Warsh, which could see some volatility as investors adjust to a new style of policy making and communication. The euro was down 0.16 percent on the day at $1.1591, while the pound shed 0.15 percent to $1.340, as the dollar took a small safe haven boost from remarks by U.S President Donald Trump that the memorandum of understanding on Iran was not final, and that he could resume a bombing campaign if he did not like it. But the big event of the day, the Fed meeting, is still to come, and left investors hesitant to take on large positions. The Fed is widely expected to stand pat at Warsh's debut meeting. The statement, economic projections and news conference, however, will be scrutinised for any signals of the Fed dropping its easing bias as officials grow more hawkish on inflation risks. "There have been many central banks meeting this month, but this is the one that's overshadowing everything," said Jane Foley, head of FX strategy at Rabobank.
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