US Dollar Flexes Ahead of the Federal Reserve Meeting

Traders are behaving excitedly, ahead of the Federal Reserve meeting scheduled later in the day.

Spectators will likely see the central bank maintain its usual dovish monetary policy stance. However, an update on bond yield decisions is what will make the difference.

Before this week, the market was largely focusing on bond yields more than on any asset. This is due to projections on upcoming inflation.

With this update, the USD index hiked by 0.1% to 91.927. The index measures the performance of the greenback against other major currencies.

The index remains steady above the 91 threshold, with expectations on back to the normal state of things in the coming months.

The USD/JPY added 0.1% to 109.22, hitting the highest settlement since June to 109.36 at one point of the trading session.

The Bank of Japan is also scheduled to convene later in the week to discuss future monetary decisions in a two-day policy meeting.

The risk-sensitive assets are affected by the firming reserve currency. In the latest charts, the dollar to euro exchange rate cemented to $1.19 amid the recent muscle-flexing.

How is Dollar to Pound Exchange Performing?

Another risky asset affected by the firming greenback is the sterling. In the latest charts, the dollar to pound exchange settled at $1.38 after shedding off 0.5% for the day.

This drop came ahead of Bank of England’s meeting also scheduled later in the week.

Like many of the world’s leading economies’ central banks, the BoE is expected to maintain a dovish monetary policy to sustain the still volatile economy.

Nevertheless, the country’s business owners are expecting a relatively better business environment and steady currency performance for the year.

The country leads European nations in terms of vaccination progress being the first country to grant emergency authorization in a vaccine company.

On the other hand, Britain also holds the highest death toll in the old continent, igniting concerns.