Dollar Remains Steady Ahead of Fed Policy Meeting

The U.S. dollar held firm before the Federal Reserve's anticipated hawkish rate cut. Analysts predict a slower rate of easing with possible future hikes. The resilient U.S. economy contrasts weak Chinese growth, affecting global currencies like the Aussie and kiwi. Central banks globally also face policy decisions.

The U.S. dollar stood strong on Wednesday ahead of the Federal Reserve policy meeting, where experts anticipate a hawkish rate cut. Despite expected cuts, analysts believe the Fed will signal reduced monetary easing moving forward, bolstering the dollar's recent performance amid market expectations of a 25 basis point reduction.

David Doyle from Macquarie predicts a hawkish shift in the Fed's dot plot, highlighting Chair Powell's focus on data-driven decisions and lesser easing. The U.S. economy's resilience is reflected in recent robust retail sales data, despite investor concerns about tariffs and tax cuts under the new administration.

Globally, the dollar's position has affected other currencies, with the Australian dollar and kiwi falling amid weak Chinese growth prospects. Meanwhile, central banks like the Bank of England and Riksbank are set to announce their policy decisions, with global monetary strategies in flux.

(With inputs from agencies.)