By Chibuike Oguh
NEW YORK (Reuters) -The U.S. dollar fell against major currencies on Wednesday, giving up some of its overnight gains as traders braced for the Federal Reserve’s long-awaited decision to cut interest rates.
The US central bank is expected to make its first rate cut in more than four years at 6pm GMT, with markets estimating a 61% probability of a 50 basis point cut and a 39% probability of a 25 basis point cut.
Chairman Jerome Powell will hold a press conference shortly after the announcement.
“What we’ve seen so far this week, just looking at the numbers, is that it fell on Monday, rose less on Tuesday and is now falling less today,” said Matthew Weller, global head of research at StoneX. Retail in Grand Rapids, Michigan.
“That’s kind of a classic pattern of pre-key event risk, when traders don’t feel too keen to commit in either direction.”
Against the Japanese yen, the dollar weakened 0.46% to 141.75 after hitting a high of 142.405 in Asian hours. The Bank of Japan will make a decision on interest rates on Friday.
The euro strengthened 0.20% against the dollar to $1.11380. The dollar also fell 0.4% against the Swiss franc to 0.844.
The dollar index, which measures the greenback against a basket of currencies including the yen and euro, fell 0.18% to 100.73.
Chinese markets resumed trading on Wednesday after the autumn festival break, with the yuan falling 0.4% to 7.0824 per dollar in offshore trading.
Sterling, the year’s best-performing G10 currency, rose to $1.32540, with the rally driven by signs of a stabilizing British economy and persistent inflation.
British inflation was 2.2% annualized in August, unchanged from July. The Bank of England is expected to leave interest rates unchanged on Thursday.
“We are likely to see a small divergence between central banks, with the Bank of England now less likely to cut rates and the Fed very likely to cut rates,” Weller added.
Currency bid prices on September 18
14:01 GMT
Description RIC Last US Close Previous session Pct Change YTD Pct High bid Low bid
Dollar index 100.74 100.91 -0.16% -0.62% 100.91 100.69
Euro/Dollar 1.1134 1.1115 0.16% 0.86% $1.114 $1.1114
Dollar/yen 141.76 142.42 -0.46% 0.51% 142.28 141.25
Euro/yen 1.1134 158.24 -0.27% 1.41% 158.26 157.06
Dollar/Swiss 0.844 0.8472 -0.35% 0.31% 0.8467 0.8424
Sterling/Dollar 1.3236 1.3163 0.56% 4.02% $1.3254 $1.3157
Dollar/Canadian 1.3587 1.3599 -0.07% 2.51% 1.3597 1.3577
Aussie/Dollar 0.6777 0.6756 0.33% -0.59% $0.6789 $0.675
Euro/Swiss 0.9397 0.9414 -0.18% 1.2% 0.9416 0.9382
Euro/British pound 0.841 0.8444 -0.4% -2.98% 0.8453 0.8405
New Zealand dollar/dollar 0.622 0.6187 0.56% -1.54% $0.6232 0.6184
Dollar/Norway 10.5653 10.5945 -0.28% 4.24% 10.6202 10.5583
Euro/Norway 11.7638 11.7919 -0.24% 4.81% 11.8138 11.7552
Dollar/Sweden 10.1835 10.189 -0.05% 1.16% 10.1987 10.16
Euro/Sweden 11.337 11.3237 0.12% 1.9% 11.345 11.307
