FOREX-Dollar rises before Fed decision and yen weakens past 160

The dollar rose broadly against major peers on Wednesday as investors awaited a U.S. Federal Reserve policy decision, with markets also on edge over an Iran war that ‌shows little sign of easing.

The dollar rose broadly against major peers on Wednesday as investors awaited a U.S. Federal Reserve policy decision, with markets also on edge over an Iran war that ‌shows little sign of easing. Caution prevailed ahead of a wave of major central bank meetings over the next two days, including decisions from the European Central Bank, the Bank of England and the Bank of Canada.

Investors are also eyeing a packed earnings slate, with Amazon, Microsoft and Meta set to ‌report results after the close. The Fed is widely expected to leave interest rates unchanged, putting the spotlight on policymakers’ assessment of how the ‌war could affect the economic outlook. The meeting could be Jerome Powell’s last as Fed chair, with the full U.S. Senate poised to confirm Kevin Warsh after he cleared a key committee vote on Wednesday.

The euro slipped 0.18% to $1.16915, while sterling fell 0.24% to $1.34870. OIL STILL ON THE RISE

"Nothing is expected from any of the policymakers in terms of ⁠hikes, and ​cuts are certainly off the table ⁠at this meeting," said Marvin Loh, senior global macro strategist at State Street in Boston. "The Fed is likely to keep that hawkish bias that the market has pivoted to. ⁠But since there are really no policy changes that are expected for an extended period of time, it's easy for them to keep the hawkish bias. Whereas ​the ECB and the BoE are expected to hike soon and might not be as aggressive as the market expects," he said.

The ⁠dollar rose 0.19% to 0.791 Swiss francs, while the dollar index gained 0.27% to 98.85. U.S. President Donald Trump discussed how to mitigate the impact of a possible months-long U.S. ⁠blockade ​of Iran's ports with U.S. oil companies, a White House official said on Wednesday.

Oil prices climbed for an eighth straight session — the longest run since May 2022 following Russia’s invasion of Ukraine — with the front-month June contract, which expires on Wednesday, up 5.5% at $117.42 a barrel. YEN INTERVENTION WATCH

The ⁠yen traded above 160 per dollar, edging closer to levels that have previously triggered intervention, despite the Bank of Japan signaling after its ⁠policy meeting on Tuesday that it could ⁠raise rates in coming months. The Japanese currency has fallen about 0.6% against the dollar and more than 2% since the war began, partly reflecting Japan’s vulnerability to higher imported energy costs.

The yen was last down ‌0.36% at 160.17 ‌per dollar and down 0.17% at 187.22 per euro.