Dollar Rallies as Central Banks Await Key Decisions Amid Auto Industry Buzz

Market anticipation mounts as the dollar strengthens, central banks prepare for key meetings, and news of a potential Nissan-Honda alliance boosts car stocks. The Federal Reserve is expected to adjust rates cautiously, influencing global financial markets as traders react to potential interest rate changes.

The dollar gained strength on Wednesday as investors adjusted portfolios ahead of key central bank meetings, while the potential Nissan-Honda tie-up spurred gains in car stocks. The S&P 500 futures were flat in Asia after declines in the U.S. session, with European futures slightly lower.

The dollar reached a one-year high against the Australian dollar and a two-year high against the New Zealand dollar. Expectations firm for the Federal Reserve to signal a cautious rate approach in 2025, despite anticipated cuts of 25 basis points.

In Asian markets, a highlight was Japan's auto sector, with Nissan shares soaring 24% amid consolidation talks with Honda. Investors anticipate cost reductions despite no formal merger announcement. Sterling remained resilient amid strong UK wage growth, contrasting broader eurozone economic challenges.

(With inputs from agencies.)