The dollar declined today, Wednesday, just hours before the Federal Reserve's decision (the U.S. central bank), which is widely expected to raise interest rates as many in the market believe it will be the last increase in the strongest tightening campaign by the bank in four decades. The U.S. central bank's decision will be announced at 18:00 GMT, and it is expected that the European Central Bank will take similar action tomorrow, Thursday, while the Bank of Japan will conclude its meeting on Friday, which is anticipated to shed some light on its policy for controlling the yield curve.
The dollar index, which measures the performance of the U.S. currency against six major currencies, fell by 0.109 percent but remains close to the highest level in about two weeks that it reached yesterday, Tuesday. The euro rose by 0.08 percent to $1.1062. The Japanese yen increased by 0.35 percent against the U.S. currency, reaching 140.38 yen per dollar. The Australian dollar dropped by 0.57 percent to $0.6753 after weaker-than-expected inflation data indicated that the Reserve Bank of Australia may reconsider raising interest rates in early August.
Against the Chinese yuan, the dollar increased by 0.19 percent to 7.1511 yuan in offshore trading, recovering some of the 0.67 percent losses from the previous session. The British pound rose by 0.17 percent to $1.2924. The Bank of England will announce its decision on interest rates on August 3, with market expectations divided between a 25 basis point increase and a 50 basis point increase.
