The Fed is widely expected to hold the policy rate steady in the 5.25-5.5% range.climbed above 1.0700 during the European trading hours on Tuesday but failed to stabilize there as the cautious market stance allowed the US Dollar to stay resilient against its rivals in the American session. Early Wednesday, the pair holds steady at around 1.0700.
In June, the dot plot showed that policymakers were expecting a total of 100 bps rate cuts in 2024. If that projection remains unchanged, the USD could struggle to preserve its strength. On the other hand, a downward revision to the total interest rate reduction forecast for next year could lift US yields and help the USD to continue to outperform its peers.
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