The dollar slipped on Friday as traders awaited the Federal Reserve’s decision on interest rates. The US central bank is widely expected to raise rates by 25 basis points, but some investors are concerned that the Fed could raise rates more aggressively if inflation remains high.
The dollar index, which measures the greenback against a basket of six other major currencies, was down 0.1% at 104.70. The euro rose 0.1% to $1.0940.
“The dollar is likely to remain under pressure until we get more clarity from the Fed,” said analysts at ING Bank. “If the Fed raises rates more aggressively than expected, that could trigger a sell-off in the dollar.”
The Fed is expected to release its decision on interest rates at 2:00 PM ET.
The dollar has been on a losing streak in recent weeks as investors have become more confident that the Fed will be able to bring inflation under control without causing a recession. The US economy grew at an annual rate of 6.9% in the second quarter https://promarkitbusiness.com/, the fastest pace in 40 years. However, inflation is also running at a 40-year high, raising concerns that the Fed may need to raise rates more aggressively than expected.
The dollar’s decline is also being supported by a stronger euro. The euro has been rising in recent weeks as the European Central Bank (ECB) is expected to begin raising interest rates in July. The ECB has been under pressure to raise rates as inflation in the eurozone has also been running at a 40-year high.
The dollar is likely to remain under pressure in the near term as traders await the Fed’s decision on interest rates. However, the dollar could rebound if the Fed raises rates more conservatively than expected.
echoesofearthmedia.news.blog 