US Dollar Outperforms Its Peers Ahead Of Fed’s Policy Decision
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- The US Dollar Index advances to near 108.20 ahead of the Fed’s monetary policy decision in which the central bank is expected to keep interest rates steady.
- Investors will be keen to know the impact of Trump’s economic agenda on the interest rate outlook from Fed Powell.
- US Donald Trump is poised to impose 25% tariffs on Canada and Mexico.
The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, rises to near Friday’s high of 108.20 in Wednesday’s North American session. The US Dollar (USD) performs strongly against its major peers ahead of the Federal Reserve’s (Fed) monetary policy decision, which will be announced at 19:00 GMT.
US Dollar PRICE Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.43% | 0.34% | -0.14% | 0.42% | 0.68% | 0.57% | 0.40% | |
| EUR | -0.43% | -0.09% | -0.52% | -0.00% | 0.24% | 0.17% | -0.03% | |
| GBP | -0.34% | 0.09% | -0.46% | 0.09% | 0.33% | 0.24% | 0.06% | |
| JPY | 0.14% | 0.52% | 0.46% | 0.54% | 0.80% | 0.68% | 0.52% | |
| CAD | -0.42% | 0.00% | -0.09% | -0.54% | 0.26% | 0.15% | -0.03% | |
| AUD | -0.68% | -0.24% | -0.33% | -0.80% | -0.26% | -0.10% | -0.28% | |
| NZD | -0.57% | -0.17% | -0.24% | -0.68% | -0.15% | 0.10% | -0.18% | |
| CHF | -0.40% | 0.03% | -0.06% | -0.52% | 0.03% | 0.28% | 0.18% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
According to the CME FedWatch tool, trades are confident that the Fed will certainly announce a pause to the current policy-easing cycle by leaving interest rates unchanged in the range of 4.25%-4.50%. Therefore, the impact of the Fed’s policy decision on the US Dollar won’t last long.
However, the Fed’s guidance on the monetary policy outlook will be more critical for currency markets for which investors will pay close attention to Chair Jerome Powell’s press conference. Powell is expected to face questions like how long the Fed will keep interest rates steady and the impact of United States (US) President Donald Trump’s economic agenda on the monetary policy stance.
Market participants are worried that Trump’s economic policies, such as immigration controls, higher tariffs, and lower taxes will be pro-growth and inflationary for the economy, which could force the Fed to leave interest rates at their current levels for longer.
Meanwhile, Donald Trump is poised to raise tariffs on Canada and Mexico by 25% from February 1. White House Press Secretary Karoline Leavitt reported on Tuesday that 25% tariffs on Canada and Mexico from February 1 are “still on the books”. Leavitt added that the President is “very much still considering 10% tariffs on China” from Saturday.
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