Dollar Holds Firm Amid Fed's Hawkish Rate Decisions

The U.S. dollar remains steady as the Federal Reserve meeting anticipates a 'hawkish cut' in interest rates. Analysts expect a pause in further easing in 2025, with current data suggesting economic resilience. Meanwhile, other currencies like the yen and sterling react to central bank moves globally.

The U.S. dollar held steady on Wednesday ahead of a crucial Federal Reserve policy meeting. Analysts predict a 'hawkish cut' in interest rates, where the Fed may trim rates but signal fewer reductions in the future. Financial markets have fully anticipated a 25 basis point cut, highlighting recent support for the dollar.

Economic experts, like Macquarie's David Doyle, foresee a shift in expectations, consistent with the latest market movements. As Fed Chair Powell addresses policymakers, emphasis is likely on slower easing, data dependency, and uncertainties around neutral rates. Beyond this meeting, the expectation is for just one further 25 bps cut in 2025.

The broader global market landscape also reflects diverse central bank actions. The Bank of Japan and Bank of England decisions are awaited, impacting currency dynamics including the yen and sterling. Meanwhile, cryptocurrencies like Bitcoin saw a drop, reflecting broader economic dynamics.

(With inputs from agencies.)