Investing.com - The U.S. dollar gained ground against a currency basket on Wednesday ahead of a widely anticipated rate hike by the Federal Reserve at the conclusion of its policy meeting later in the day.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was up 0.25% to 93.97 by 08:34 AM ET (12:34 GMT).
The U.S. central bank is widely expected to raise interest rates by a quarter of a percentage point to 2.25%, in what would be its third rate hike of the year.
With the rate hike fully priced in and investors also expecting another rate hike in December attention will be turning to the Fed’s plans for the direction of monetary policy in 2019.
Indications that the Fed is looking to remain hawkish next year would likely bolster the dollar, while suggestions that it may slow the pace of rate hikes or that it is coming to the end of its tightening cycle next year could send the greenback lower.
Overall market sentiment remained somewhat subdued after U.S. President Donald Trump’s appearance at the United Nations General Assembly on Tuesday, where he reiterated his administrations tough stance on trade saying that his country would "no longer tolerate abuse" on that front.
The dollar was steady against the yen, with USD/JPY last at 113.01, up from an intra-day low of 112.74.
The euro moved lower, with EUR/USD sliding 0.29% to 1.1730.
Sterling was also weaker, with GBP/USD off 0.15% at 1.3157 as investors remain pessimistic about prospects for Brexit negotiations between the UK and the European Union.