Dollar holds near two-week high ahead of Fed and RBNZ decisions

what happened

The dollar held near a two-week high on Wednesday morning while markets waited for a string of central bank decisions. According to Reuters, the Federal Reserve is expected to leave rates unchanged, but its signal on a possible December hike could be the day's main event.

The euro traded at $1.1129 and the British pound at $1.3307. Against the yen, the dollar gained 0.1% to 158.03. The kiwi dollar was level at $0.5682 ahead of a Reserve Bank of New Zealand decision, where a rate hike is widely expected. The Australian dollar rose 0.1% to $0.7031 before the release of September CPI data.

CME Group's FedWatch tool shows fed funds futures pricing an implied 91% probability that the Federal Open Market Committee keeps rates on hold. The dollar index, which tracks the greenback against a basket of six currencies, rose 0.3% to 102.40 on Tuesday, its highest since October 14. The yield on the US 10-year Treasury was unchanged at 4.9967%. Bitcoin was flat at $80,736.07, while ether rose 0.1% to $2,345.25.

why it matters

For markets, the key question is not the rate decision itself but how the Fed changes the perceived odds of a December hike. That shapes the dollar, Treasury yields and investor appetite for cryptocurrencies.

market impact

Dollar and currency pairs: the Fed's signal on a December hike will set the direction of moves

tags

instruments