The dollar maintained its upward trend against a basket of peer currencies on Wednesday, as traders consider the likelihood that the Federal Reserve (the U.S. central bank) may soon begin lowering interest rates. According to the CME Group's FedWatch tool, investors are betting on a 69% chance of a rate cut during the Federal Open Market Committee meeting in March, followed by a 63.3% likelihood of another cut in May.
On Tuesday, Raphael Bostic, President of the Federal Reserve Bank of Atlanta, stated that he expects two interest rate cuts in the second half of next year, but added that there is no "urgent need at this time." Thomas Barkin, President of the Federal Reserve Bank of Richmond, also mentioned on Tuesday that the performance of the economy will determine whether the central bank can meet expectations for rate cuts.
The dollar index rose by 0.13% to 102.25 after dropping more than 0.3% on the previous day, having touched a four-month low of 101.76 last week. The euro fell by 0.19% to 1.0958 dollars, while the pound sterling was at 1.2715 dollars in the latest trading. The yen remained stable at 143.73 against the dollar after declining to 144.95 the day before.
The Chinese yuan weakened in offshore trading against the U.S. dollar to 7.1359 dollars. The Australian dollar hovered mostly around 0.6766 dollars, slightly down from its new five-month high of 0.6777 dollars. The New Zealand dollar recorded 0.6276 dollars in the latest trades, after reaching its highest levels since July 20 at 0.6282 dollars earlier in the session.
In the cryptocurrency market, Bitcoin rose by 1.6% to 42,922.00 dollars.
