Finance
US Dollar Edges Lower as Traders Await Fed Rate Cut Decision
Published by Jessica Weisman-Pitts
Posted on September 18, 2024
3 min readLast updated: January 29, 2026
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Published by Jessica Weisman-Pitts
Posted on September 18, 2024
3 min readLast updated: January 29, 2026
Add as preferred source on GoogleBy Chibuike Oguh
NEW YORK (Reuters) -The U.S. dollar edged lower against major currencies on Wednesday, giving up some of its overnight gains, as traders braced for the Federal Reserve’s much-anticipated decision to cut interest rates.
The U.S. central bank is expected to deliver its first interest rate cut in more than four years at 1800 GMT, with markets pricing a 61% probability of a 50 basis point cut and 39% chance of a 25 basis point cut.
Chair Jerome Powell will hold a press conference shortly after the announcement.
“What we’ve seen so far this week, just looking at the dollar index is that it fell on Monday, it rose by less on Tuesday, and now it’s falling by less so far today,” said Matthew Weller, global head of research at StoneX Retail in Grand Rapids, Michigan.
“That’s sort of the classic pre-key event risk type of pattern when traders aren’t feeling too strongly about committing in either direction.”
Against the Japanese yen, the dollar weakened 0.46% to 141.75 after reaching as high as 142.405 in Asia hours. The Bank of Japan will decide on interest rates on Friday.
The euro strengthened 0.20% against the greenback to $1.11380. The dollar was also down 0.4% against the Swiss franc to 0.844.
The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, fell 0.18% to 100.73.
China’s markets resumed trade on Wednesday after the mid-autumn festival break, with the yuan down 0.4% at 7.0824 per dollar in offshore trading.
Sterling, the best performing G10 currency of the year, gained at $1.32540, with its rally being driven by signs of a steadying UK economy and sticky inflation.
British inflation stood at an annual rate of 2.2% in August, unchanged from July. The Bank of England is expected to leave rates unchanged on Thursday.
We’ll likely see a bit of a divergence between the central Banks, with the Bank of England now less likely to cut interest rates at all and the Fed very likely to cut,” Weller added.
Currency bid prices at 18 September
02:01 p.m. GMT
Description RIC Last U.S. Close Previous Session Pct Change YTD Pct High Bid Low Bid
Dollar index 100.74 100.91 -0.16% -0.62% 100.91 100.69
Euro/Dollar 1.1134 1.1115 0.16% 0.86% $1.114 $1.1114
Dollar/Yen 141.76 142.42 -0.46% 0.51% 142.28 141.25
Euro/Yen 1.1134 158.24 -0.27% 1.41% 158.26 157.06
Dollar/Swiss 0.844 0.8472 -0.35% 0.31% 0.8467 0.8424
Sterling/Dollar 1.3236 1.3163 0.56% 4.02% $1.3254 $1.3157
Dollar/Canadian 1.3587 1.3599 -0.07% 2.51% 1.3597 1.3577
Aussie/Dollar 0.6777 0.6756 0.33% -0.59% $0.6789 $0.675
Euro/Swiss 0.9397 0.9414 -0.18% 1.2% 0.9416 0.9382
Euro/Sterling 0.841 0.8444 -0.4% -2.98% 0.8453 0.8405
NZ Dollar/Dollar 0.622 0.6187 0.56% -1.54% $0.6232 0.6184
Dollar/Norway 10.5653 10.5945 -0.28% 4.24% 10.6202 10.5583
Euro/Norway 11.7638 11.7919 -0.24% 4.81% 11.8138 11.7552
Dollar/Sweden 10.1835 10.189 -0.05% 1.16% 10.1987 10.16
Euro/Sweden 11.337 11.3237 0.12% 1.9% 11.345 11.307
(Reporting by Chibuike Oguh in New York; additional reporting by Tom Westbrook and Linda Pasquini; Editing by Mark Potter)
Foreign exchange, or forex, refers to the global marketplace for trading national currencies against one another. It is the largest financial market in the world, where currencies are bought and sold.
Interest rates are the amount charged by lenders to borrowers for the use of money, expressed as a percentage of the principal. They can influence economic activity and inflation.
Financial markets are platforms where buyers and sellers engage in the trade of assets such as stocks, bonds, currencies, and derivatives. They play a crucial role in the economy by facilitating capital flow.
Currency hedging is a risk management strategy used to protect against fluctuations in exchange rates. It involves taking a position in the forex market to offset potential losses in another investment.
A central bank is a national institution that manages a country's currency, money supply, and interest rates. It oversees the banking system and implements monetary policy to maintain economic stability.
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