Fed Decision Looms Amid Volatility: Dollar's Uncertain Path

The dollar steadied before the U.S. Federal Reserve's policy decision, amid market volatility influenced by President Trump's trade policies and interest rate expectations. The Fed is expected to hold rates, but attention remains on Fed Chair Powell for hints of potential future cuts, with broader economic uncertainties looming.

The dollar held steady on Wednesday as investors awaited the U.S. Federal Reserve's policy decision. Key focus is on potential indications about interest rate adjustments this year, although the central bank is broadly forecasted to maintain current policies for now.

Since President Trump's inauguration, expectations of growth-spurring trade policies have led to speculation on heightened interest rates. Volatility in currency markets persists, particularly as trade actions have not occurred as anticipated, affecting the dollar's strength.

Markets focus keenly on the Federal Reserve's first yearly meeting outcome as Trump advocates for interest rate cuts. However, Chair Jerome Powell's stance remains cautious amid economic uncertainty, with money markets predicting no rate cuts until June.

(With inputs from agencies.)