US Dollar Trading in a Tight Range in Anticipation of a Third Rate Cut by the Fed
Early on Wednesday, the US dollar is trading in a tight range as traders hesitate to make moves before the Fed announces its interest rate decision later in the day. At the time of writing, the US dollar index DXY is trading at around 97.70.
The two-day monetary policy meeting will conclude today and the markets are widely expecting the US central bank to cut interest rates for a third time this year on the back of trade tensions which have impacted economic growth and inflation in the US. Given that the rate cut is almost completely priced in, it’s highly likely that the US dollar would fail to make significant moves following the announcement, unless there’s a considerable divergence in either direction from the expected scenario.
Over the past few days, the US dollar had gained some strength against its major peers over rising hopes for an interim trade deal between the US and China progressing well and nearing finalizing. However, the sentiment dipped a little after a US administration official let it slip that the deal could take a little longer to be worked out and signed.
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