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Dollar Flat as Fed Gets Two-Day Meeting Underway

12/19/2018, 3:27:39 PMTrading Strategies
Dollar Flat as Fed Gets Two-Day Meeting Underway

The U.S. dollar was flat against its rivals Tuesday as the Federal Reserve got its two-day meeting underway.

The U.S. dollar index, which measures the greenback against a trade-weighted basket of six major currencies, fell by 0.06% to 96.49.

The greenback remained well above session lows despite growing expectations the Federal Reserve will adopt a more dovish outlook on monetary policy in the wake of slowing global growth and trade tensions between the U.S. and China.

The Fed is expected to raise rates on Wednesday, but signal fewer rate hikes for the upcoming year.

Nomura forecasts the dot plots, a chart of future interest rate expectations by Fed members, to show only two hikes are appropriate for 2019, below the central bank's previous guidance of three hikes.

GBP/USD rose 0.19% to $1.2640, but eased from a session high of $1.2707 after the British government said it would ramp up preparations for a no-deal Brexit, which would see the U.K. leave the European Union without a trade agreement.

EUR/USD rose 0.20% to $1.1370 on the back of easing political uncertainty in the bloc as Italy agreed a deal with the European Commission over its 2019 budget, a spokeswoman at the Economy Ministry said on Tuesday.

USD/CAD, meanwhile, rose 0.54% to C$1.1348 as the loonie came under heavy pressure following a 5% plunge in oil prices amid fears of a glut in supply.

The yen, meanwhile, tacked on gains against the greenback as Wall Street gave up some early gains amid easing risk appetite.

USD/JPY fell 0.31% to Y112.48.