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HomeForex NewsDollar weakens as investors brace for expected Fed caution

Dollar weakens as investors brace for expected Fed caution

By Tom Finn

LONDON (Reuters) – The dollar fell on Wednesday as investors bet that the Federal Reserve would signal plans to slow its pace of interest rate raises at a keenly-watched meeting later in the day.

Fed policy makers are widely tipped to raise rates for a fourth time this year but also to express caution about future monetary tightening due to concern about slowing global growth.

Expectations of a pause from the Fed amid a U.S.-China trade conflict and global financial market volatility has led some investors to question if the dollar’s stellar run will continue into 2019.

U.S. President Donald Trump has repeatedly berated the Fed and on Tuesday said in a Tweet it was “incredible” for the central bank to even consider tightening given global economic uncertainties.

“A hike is still likely, regardless of Trump’s displeasure, but there’s a very good chance that they will reduce the number of hikes in 2019 to two (from three),” said Kit Juckes, global head of FX strategy at Societe Generale (PA:SOGN).

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