FALCON POWERS – The dollar declined on Wednesday ahead of the conclusion of the two-day policy meeting of the Federal Reserve, with investors focusing on whether Fed Chair Jerome Powell would adopt a more hawkish tone amid persistently high inflation above the targeted 2 percent level. Higher-than-expected consumer price inflation in March dashed hopes that the elevated readings in January and February were transitory, leading traders to push back their expectations for the timing of an interest rate cut by the central bank.
The dollar index, which measures the currency against a basket of six major currencies, fell by 0.11 percent to 106.20 after earlier approaching the 106.49 level, the highest since April 16. Surpassing the 106.51 level would have marked the highest level since November. However, Powell is unlikely to propose another rate hike on Wednesday but is expected to signal a prolonged period of elevated borrowing costs.
This could disappoint investors and weaken the dollar against other currencies.
The euro rose by 0.14 percent to $1.0682, while the pound sterling declined by 0.09 percent to $1.2479.
The dollar dropped by 0.17 percent against the Japanese yen to 157.53.
Bitcoin fell by 4.41 percent to $57,226 after hitting $56,483 earlier in the session, the lowest level since February 27.
