Dollar rises as bets on US interest rate hike increase
The US dollar rose on Wednesday, approaching its highest levels in several weeks, as markets await the Federal Reserve's decision on interest rates. Expectations point to a 90% probability of a 25-basis-point rate hike, boosting the dollar's gains.
The US dollar rose on Wednesday, maintaining its recent gains and approaching its highest levels in several weeks against several major currencies. This rise comes ahead of the Federal Reserve's decision, which traders expect to be the first in a potential series of interest rate hikes. Carol Kong, a currency strategist at the Commonwealth Bank of Australia, stated that the probability of a 25-basis-point rate hike is nearly 90%, meaning the dollar will see a slight increase if the Fed decides to raise rates. The dollar rose alongside bond yields overnight, posting its largest gains against the yen and the New Zealand dollar, pushing the kiwi to a two-month low of $0.5749 in Asian morning trading, and the yen to a one-week low of 155.43 against the US currency. The euro traded at $1.1535, near its one-month low, while the British pound at $1.3470 was not far from its six-week low. The Australian dollar held steady at $0.7126. Currency markets have not seen significant volatility as global bond yields have risen in tandem over the past few weeks.