The US dollar declined to a certain extent ahead of the Federal Reserve meeting later today. The currency recorded a limited performance over the last two weeks as attention turned toward today’s meeting.
While traders continue to see the Fed maintaining its interest rates unchanged today, expectations have been changing in regard to the next steps in monetary policy.
Anticipations for March’s meeting currently point to a 54% probability for a rate cut after markets reacted to the latest ADP job report.
As a result, markets could focus on Jerome Powell’s speech for clues on the Federal Reserve’s next steps and a potential date for a start in interest rate cuts.
Additionally, Friday’s NFP job report could also affect interest rate expectations and the dollar’s performance as strong data could limit rate cut anticipations.