US dollar index steady around 101.00 ahead of FOMC decision

The US dollar was about to finish Tuesday with minor changes compared to Monday’s closing levels. The greenback moved in ranges ahead of the decision of the Federal Reserve. On Wednesday, the US central bank, according to market consensus, will announce a rate hike. If the Fed moves as expected, attention would turn to the statement, the “dot plot” projection and  Janet Yellen’s press conference. 

“The day’s highlight will be the FOMC meeting, where a Fed funds rate hike to a 0.50%-0.75% range is widely expected (and priced in by markets). Thus, any surprises will come from the tone of the statement and Yellen’s press conference. Also of interest will be the updated economic forecasts and Fed funds rate projection, with markets currently fully agreeing with the two hikes projected in 2017”, said analysts from Westpac. 

DXY steady 

The US Dollar index, which gauges the US dollar against its main competitors, is marginally higher on Tuesday. Currently, it stands at 101.05 after bouncing from the lowest level since Thursday, that reached at 100.70/75. 

The US dollar erased losses in the currency market during the American session as equity indexes in Wall Street reached new record highs. The Dow Jones was up 0.65%, very close to the 20,000 mark, while the Nasdaq was gaining 1.10%. 

Level to watch 

To the upside, resistance levels could be seen at 101.15 (daily high), 101.75 (last week high) and 102.05 (2016 high). On the opposite direction, support might lie at 100.70/75 (daily low), 100.60 (Dec 6 & 7 high) and 99.95 (Dec 06 low).