CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 64% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the High risk of losing your money.

Dollar off recent highs ahead of expected Fed rate hike

3/15/2017, 9:43:34 AMBasics of Trading
Dollar off recent highs ahead of expected Fed rate hike

The dollar was on tenterhooks in Asian trading on Wednesday as investors waited anxiously to see what clues the U.S. Federal Reserve would soon reveal on its monetary policy outlook.

The U.S. central bank began its two-day monetary policy meeting on Tuesday. With the futures market pricing in more than a 90 percent chance that it would raise interest rates, investors' main focus turned to what its statement would say about the pace of hikes this year.

Against its Japanese counterpart, the greenback edged down 0.1 percent to 114.67 , shy of last week's high of 115.51, which was its highest level since Jan. 19 as expectations built for the rate increase.

"I think the dollar might have trouble above the 115 level today, with Japanese exporters still seeking to sell above it ahead of the end of the Japanese fiscal year this month," said Kaneo Ogino, director at foreign exchange research firm Global-info Co in Tokyo.

"Of course, everyone is waiting for the Fed, so we're expecting range-bound trading until we get some clear signals about expectations for the rest of the year," he said.

U.S. inflation data overnight cemented rate hike expectations. U.S. producer prices rose more than expected last month, marking the most robust year-on-year gain in nearly five years.

Sterling nursed its losses after tumbling to an eight-week low of $1.2110 in the previous session, amid worries about a prolonged and painful process of the UK's exit from the European Union.

British Prime Minister Theresa May won parliamentary backing on Monday to begin the process of leaving the EU and start two years of talks that will shape the future of Britain and Europe, as Scotland mulled a possible second independence referendum.

The euro edged up 0.1 percent to $1.0613 but remained shy of its Monday high of $1.0714, its loftiest peak since early February, as concerns about a Dutch vote offset market speculation that the European Central Bank could be poised to wind down its stimulus program.

The Netherlands will vote on Wednesday in an election that was seen as a test of anti-immigrant sentiment even before a rift with Turkey at the weekend put immigration and nationalism at the top of the political agenda.