Dollar fluctuates with the receding expectations of an interest rate hike

The dollar saw a volatile performance on Wednesday as expectations of a Federal Reserve rate hike this month receded, however moves remained range-bound as traders focused on whether an end to monetary tightening was in sight around the world.

The Australian dollar recorded the highest level in three weeks, extending its gains in the wake of the interest rate increase and monetary tightening by the central bank, recording a peak at $ 0.6690 in early Asian trading.

The Reserve Bank of Australia raised interest rates a quarter point to the highest level in 11 years on Tuesday.

Likewise, growing expectations that the Bank of Canada will resume monetary tightening when it makes its interest rate decision later on Wednesday sent the Canadian dollar higher to near a one-month high of 1.3388 per dollar.

The Bank of Canada was the first major global central bank to stop raising interest rates in January.

Financial markets widely expect the US central bank to keep interest rates unchanged at its monetary policy meeting next week, however, some expect it to resume rate hikes later this year.

The pound sterling rose against the dollar 0.05 percent to 1.2429 dollars, and the Japanese yen increased by almost 0.2 to 139.32 against the dollar.

The euro fell 0.08 percent to $1.0685, while the dollar index rose 0.08 percent to 104.16.