Dollar in holding pattern ahead of Fed meeting

© Reuters. The dollar remained in period of consolation ahead of Fed rate decision – The dollar traded flat against a basket of major currencies on Tuesday, as investors anticipated that the Federal Reserve would leave its benchmark rate unchanged on Wednesday.

The , which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose by 0.01% to 98.99 by 18:10 EDT.

In what was a quiet day for top-tier economic data release, the dollar remained in period of consolidation, as investors seemed hesitant to initiate large dollar positions, as the Federal Reserve Open Market Committee (FOMC) commences its two day meeting, ahead of an interest rate decision, scheduled for Wednesday.

Economists’ forecast that the Fed will leave its benchmark rate but investors are likely to parse through the Federal Reserve statement for any hints concerning a June rate hike.

According to’s , 62.4% of traders expect the Federal Reserve to hike interest rates in June.

Elsewhere, the final round of the French election, scheduled for Sunday May 7, offset weaker than expected economic data as current polls predict an easy victory for pro-EU candidate Emmanuel Macron.

continued its march higher to $1.0911, up 0.12%, while sank 0.22% to 0.8441, despite the release of bearish economic data, which showed an uptick in Eurozone and a slowdown in .

Meanwhile, rose to $1.2923, as investors cheered the release of bullish UK manufacturing data, which spiked to a three-year high.

The Markit/CIPS UK manufacturing Purchasing Managers’ Index (PMI) rose to 57.3 from 54.2 in March, economists’ expectations,

rose 0.24% to 112.11, as the greenback continued its recent rally against its yen counterpart, after investors abandon the flight to safely trade amid falling geopolitical tensions over North Korea.

traded at $1.3732, up 0.38%.

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