The dollar remained close to its five-week low on Wednesday as Wall Street awaits the Federal Reserve’s latest interest rate decision. Currently, the market expects a 25 basis point hike.
While some expect the central bank to put a pause on its interest rate hikes following the crisis affecting global banks this month, Fiona Cincotta, a strategist with City Index, expects an interest rate increase to go ahead.
Following the rescue takeover of Credit Suisse by UBS, the Federal Reserve has assured that it has made provisions to safeguard the U.S. financial system against similar collapse. This revelation helped to ease investors’ minds, and in return, reduce their reliance on the U.S. dollar, leading to its decline.
Of the G10, the pound proved to be the strongest performer against the greenback, gaining 0.5% to trade at $1.2279. The sterling’s rise also comes as UK inflation rose higher than expected in February, resulting in the Bank of England also contemplating its monetary policy going forward.
The euro gained 0.2% against the dollar to $1.0795 while falling 0.3% to the pound, sitting at 87.81 pence. Bitcoin was up 0.3% at $28,274, however, remained below Monday’s nine-month peak.
