There was little movement from the US dollar yesterday due to the lack of US data. Much of the focus and talk is based on the central bank’s Federal Open Market Committee (FOMC) interest rates decision on Thursday. Some experts suggest that there is a 30% chance of a rate hike; it is said to be a ‘very close call’, which will not be affected by external sources.
Should we gain indication that the Federal Reserve is moving closer to a rate hike, we would expect to see the dollar strengthen. On the other hand, if the central banks signals intentions to keep its rates at rock-bottom in the short-to-medium term, we could see the dollar weaken against currencies like sterling.