Dollar was in a Stable Position Ahead of Fed’s Statement

The U.S. dollar was in a stable position on Wednesday, with currency markets quiet as investors waited to see if the Federal Reserve would reinforce market expectations for rate hikes in 2022.

The central bank’s policy statement, as well as economic projections, are due at 19:00 GMT. Its meeting comes as the rapid spread of the omicron variant raised concerns about the future of the global economy. Preliminary evidence suggests that Covid’s vaccines may be less effective against infection and transmission linked to Covid’s new variant.

Nevertheless, the explanation of Fed hawkishness kept the U.S. dollar strong in recent weeks. The dollar saw little movement since it hit 96.938 last month, its highest since July 2020.

Dollar, yen, and pound

The U.S. dollar held firm in the Asian session, then slipped slightly as European markets opened, down less than 0.1% on the day at 96.517.

Against the Japanese yen, the U.S. currency was up 0.2% at 113.815.

The euro gained 0.1% to $1.1265 ahead of the European Central Bank (ECB) meeting on Thursday. Analysts expect the ECB to confirm that its pandemic bond-buying program will end next March. 

The British pound briefly rose against the greenback after data showing that U.K. inflation jumped to its highest level in more than 10 years in November. The pound stood at $1.32505.

Analysts expect the Bank of England to maintain rates when it meets on Thursday, due to the spread of omicron. Covid’s new variant continues to spread in Britain.

The Australian dollar advanced 0.3% to $0.7125. The New Zealand dollar dropped 0.1% $0.6735. 

The world’s most well-known cryptocurrency Bitcoin fell 0.3% on the day to $48,242.23.