Global markets witnessed a state of anticipation as the US dollar fell on Wednesday, ahead of the announcement of its decision on interest rates.
The dollar’s decline was supported by an improved investor appetite for risk.
Optimism about the interim agreement between the United States and Iran has also contributed to a decline in demand for the U.S. currency as a safe haven.
Major currencies held steady against the dollar during Asian trading.
The euro and the pound sterling held stable, while the New Zealand dollar rose slightly.
Markets await interest rate decision
Most analysts expect the US central bank to keep interest rates unchanged at its current meeting.
But all eyes are on the official statement and press conference for any signs of the direction of monetary policy in the coming months.
Economists believe that the bank may adopt a cautious stance in light of the continued inflation risks and the slowdown of some economic indicators.
Japanese Yen Under Pressure
The Japanese yen, on the other hand, did not benefit much from the dollar’s weakening, despite the Bank of Japan raising interest rates to the highest level in more than three decades.
These developments have kept traders on the lookout for any possible intervention by Japanese authorities to prop up the local currency if it continues to weaken.
Continued caution in the markets
The Reserve Bank of Australia (RBA) has also kept interest rates unchanged, but has signaled that additional steps could be taken if inflation remains at elevated levels.
