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Dollar Dips Ahead of Fed, Kiwi at 1-Month Highs

HomeForexDollar Dips Ahead of Fed, Kiwi at 1-Month Highs
12
Dec
Dollar Dips Ahead of Fed, Kiwi at 1-Month Highs
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The dollar dipped against a basket of the other major currencies on Tuesday as investors awaited this week’s Federal Reserve meeting, while the New Zealand dollar hit one-month highs after the appointment of a new central bank head.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, edged down 0.11% to 93.84 by 03:30 AM ET (08:30 AM GMT), pulling away from Friday’s two-week high of 94.08.

The Fed is widely expected to raise interest rates at its two-day policy meeting that will end on Wednesday and is currently seen tightening two to three times next year, but concerns over tepid inflation could alter the outlook for 2018.

The Bank of England and the European Central Bank will also meet this week and are expected to hold rates steady.

The dollar was a touch lower against the yen, with USD/JPY edging down 0.11% to 113.42 after rising as high as 113.68 on Monday, the highest level in a month.

The euro pushed higher, with EUR/USD rising 0.15% to 1.1786.

Sterling was also higher, with GBP/USD last changing hands at 1.3360 ahead of UK inflation data for November, which was expected to show that a squeeze on the cost of living continued last month.

The New Zealand dollar rose to a one-month high, building on strong gains from the previous session, with NZD/USD rising 0.52% to 0.6947.

Demand for the kiwi continued to be underpinned after the government appointed Adrian Orr as the new governor for the Reserve Bank of New Zealand for a five-year term, starting March 2018.

Orr, a former central banker, is seen a safe pair of hands who can likely avoid a radical shake-up of monetary policy.

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