Currencies Overview: Dollar Rallied in Contrast to Euro Before The US Fed Meeting

The dollar rose against a basket of currencies on Wednesday, January 27th, as markets awaited comments by US Federal Reserve Chairman Jerome Powell, who is likely to renew his commitment to a super-easing policy.

The dollar compensated for declines against riskier currencies, even as hopes for a pandemic recovery received a boost from the International Monetary Fund raising its forecast for global growth in 2021.

Treasury yields, which have supported the dollar’s ​​rise since the start of this year, fell overnight in light of caution about the final size and delays facing a fiscal stimulus plan of about $ 2 trillion proposed by President Joe Biden.

Powell is due to hold a press conference after the Fed’s two-day monetary policy meeting, which ends Wednesday.

The dollar index rose 0.1% to 90.2 on Wednesday in Europe, after dropping 0.2% in the previous session.

The pound rose to its highest level since April 2018, to $1.3753, before dropping slightly in trading.

The Australian dollar fell 0.2% to 77.3 US cents, to shrink a 0.5% gain on Tuesday. The euro fell 0.1% to $ ]1.2.

Analysts said that published reports stated that the European Central Bank is studying whether the differences from the US Federal Reserve policy support the euro, as part of a broader review of financing conditions, will not have a tangible impact on the single currency.