Dip in the dollar takes a breather with Fed in focus

The dollar’s recent decline paused on Thursday as traders looked ahead to interest-rate decisions due next week in the United States, Japan and Europe, Business Recorder reported. Markets broadly anticipate policymakers to keep rates unchanged, while expectations that US rates will remain elevated have supported demand for the dollar. Recent advances by sterling and the Canadian, Australian and New Zealand dollars indicate that some investors have reduced dollar positions, although Thursday’s moves were limited.

Sterling traded at $1.33955 after reaching $1.3409 earlier in the week, while the Australian dollar stood at $0.7025 and New Zealand’s currency touched $0.5709. The Canadian dollar was near C$1.4032 per US dollar, with a rate increase anticipated in Canada; Australia’s deputy central bank governor also pointed to a worsening inflation outlook. The euro remained above $1.12, while the yen held near 158 per dollar. The Federal Reserve is expected to hold in October, with markets anticipating a December increase.