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Dollar trades mixed against major currencies before the Federal Reserve meeting on Tuesday

Dollar trades mixed against major currencies before the Federal Reserve meeting on Tuesday

The dollar traded mixed against the major currencies Monday ahead of this week's Federal Reserve meeting.
The 12-nation euro bought $1.3251 in afternoon New York trading, up from $1.3200 in New York late Friday, when it lost nearly a cent following positive U.S. jobs data. The British pound also edged up to $1.9587 from $1.9525.
However, the dollar strengthened against the Japanese currency, climbing to 116.88 yen from 116.47 yen on Friday. The dollar hit a two-week high of 117.05 yen during trading as expectations of a rate increase by the Bank of Japan diminished.
The Fed is widely expected to keep its benchmark interest rate unchanged at 5.25 percent on Tuesday. That would mark the fourth such decision in a row, following a string of increases since 2004.
"There's strong consensus in the market that the Fed will leave rates unchanged but it's the accompanying statement that will most likely provide early direction," said David Jones, chief markets analyst for CMC Markets in London. "With the outlook for the U.S. economy seemingly warming once more, a hawkish tone may well be sufficient to see the dollar continue to trend higher."
The euro has hit a series of 20-month highs against the dollar over recent weeks, while the pound recently hit a 14-year high. The British currency has failed to fulfill analysts' predictions that it would hit the $2 mark, however.
The euro has been powered by expectations that the gap between U.S. and European interest rates will continue to narrow as the European Central Bank raises rates. The Bank of England's rates are at a five-year high.
Higher interest rates, a weapon against inflation, support a currency by making assets denominated in that currency more attractive to investors.
In other New York trading, the dollar bought 1.2014 Swiss francs, down from 1.2049 late Friday, and 1.1481 Canadian dollars, down from 1.1498.


Updated : 2021-10-21 01:08 GMT+08:00