The dollar approached a three-week high against the Yen and stood tall against the Euro on Tuesday ahead of the Federal Reserve’s policy meeting, which could give signs on how many more rate hikes might come out of the U.S. this year.
The U.S. Dollar index, which measures the strength of the U.S. Dollar versus a group of six other major currencies, rose by 0.26 percent to end the session at 93.82.
The Fed began its two-day meeting, where it is widely expected to raise interest rates for the second time this year. Earlier on Tuesday, data showed U.S. consumer prices rose in May, matching analysts’ forecasts and reinforcing the view the Fed would raise short-term interest rates gradually.
Reports that Fed Chair Jerome Powell was considering holding a news conference and taking questions after every Fed meeting also supported the dollar. The Fed currently holds a news conference after every other meeting and is scheduled to hold one on Wednesday.
Over in Europe, the EURUSD weakened against the Greenback on Tuesday; the EURUSD dropped by 0.33 percent to end the session at 1.1743. ECB policy meeting on Thursday is expected to dictate the Euro’s near-term trend.
Speculation that the ECB could signal an intention to start unwinding its massive bond-purchasing program had pushed up the Euro to a three-week high of $1.1840 last week, even though the common currency has been unable to withstand those gains.
Meanwhile, in the United Kingdom, the Sterling stayed untouched against the Dollar on Tuesday, to end the session at 1.3370. Sterling had risen on Tuesday after British Prime Minister Theresa May saw off a rebellion in parliament over amendments to a bill for the country’s exit from the EU next year.
Regarding the safe-haven assets, the Japanese Yen weakened against the Greenback on Tuesday; the USDJPY rose by 0.3 percent to close at 110.36, while the Swiss Franc weakened against the Greenback, the USDCHF rose by 0.1 percent to trade 0.9865 at the close.
Meanwhile, Gold fell against the Greenback on Tuesday; the XAUUSD dropped by 0.35 percent to end the session at 1295.6 U.S. Dollars per ounce.
The Canadian dollar weakened against its U.S. counterpart on Tuesday as potential buyers of the currency held off in the hope of seeing cheaper levels after a Federal Reserve interest rate decision on Wednesday. The USDCAD rose by 0.27 percent to close the session at 1.3013.
Over in Australia and New Zealand, The Australian Dollar dropped by 0.5 percent on Tuesday to trade at 0.7569 at the close, and the New Zealand Dollar dropped by 0.1 percent to end the session at 0.7005.