3 months ago
Forex

U.S. Dollar Rises as Investors Look Ahead to Fed Meeting

Investing.com - The U.S. dollar was higher on Friday, as investors turned their focus to the expected Federal Reserve

Investing.com - The U.S. dollar was higher on Friday, as investors turned their focus to the expected Federal Reserve rate increase next week, even as uncertainty over next year’s hikes kept gains in check.

The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, rose 0.5% to 97.52 as of 5:20 AM ET (10:20 GMT).

The Fed meets for two days next week and is expected to increase rates, with a 79.2% chance priced in, according to Investing.com’s Fed Rate Monitor Tool.

Still, investors remain uncertain of the number of rate hikes in 2019, after dovish comments from Fed officials who have signaled that interest rates are nearing a "neutral range" where they do not stimulate or hinder economic growth.

"There is a lot of disagreement in the markets over the Fed's rate hike course in 2019 with traders expecting anywhere between one to four rate hikes," said Michael McCarthy, chief markets strategist at CMC markets.

The dollar was lower against the safe-heaven Japanese yen, with USD/JPY decreasing 0.07% to 113.53.

Meanwhile the pound was lower as Brexit woes continued, as it seems unlikely that UK Prime Minister Theresa May’s party will support her agreement with Brussels on leaving the European Union in March. GBP/USD slipped 0.3% to 1.2605.

The euro was pushed down by the stronger dollar, with EUR/USD falling 0.6% to 1.1291.

Elsewhere, NZD/USD slumped 0.9% to 0.6788 while AUD/USD was down 0.8% to 0.7163. The Canadian dollar decreased with USD/CAD up 0.3% to 1.3389.

-Reuters contributed to this report.