The dollar index remained largely steady around 107 on Wednesday, as caution prevailed ahead of the Federal Reserve's expected interest rate cut later in the day.
DXY mostly unchanged around 107
Markets are pricing in a 97% probability of a quarter-point reduction, with traders closely watching the updated economic projections and Fed Chair Powell's comments following the meeting. There is growing speculation that the Fed may signal fewer rate cuts in 2025 than initially anticipated, with some traders expecting a pause as soon as January.
Focus on macro data
On the data front, US retail sales exceeded expectations in November, driven by strong consumer spending, while industrial production unexpectedly declined for the third consecutive month. Meanwhile, investors are also gearing up for monetary policy announcements from the Bank of England and the Bank of Japan later this week.
