The US dollar continued to record volatile trading and saw some pressure for the last three trading sessions. While it saw significant price swings, the US currency remained without clear direction for most of this month.
The dollar could stay that way as traders await the Federal Reserve’s meeting tomorrow and could err to the side of caution in the meantime.
The Federal Reserve is expected to keep its interest rates unchanged. The current higher-for-longer approach could continue to support the dollar against other currencies while the US economy remains resilient.
The comments from the Federal Reserve’s president could remain at the center of attention as traders search for clues regarding the next steps in monetary policy.
The euro continued its rebound after the better-than-expected German GDP growth data. French economic data came up as forecast and supported the European currency’s trend. However, the inflation in the euro area declined faster than expected, and could contribute to a softer stance from the European Central Bank and could weigh on the euro.
Today’s Bank of Japan decision has negatively impacted the yen, as the Bank kept interest rates unchanged and could allow some flexibility in its yield curve control policy. Low yields could continue to weigh on the Japanese currency while a potential intervention could continue to pose risks.