By Alun John and Rae Wee LONDON/SINGAPORE, June 17 The dollar inched higher against most major peers on Wednesday ahead of the Federal Reserve’s first policy decision under chair Kevin Warsh, which could see some volatility as investors adjust to a new style of policy making and…
mmunication. The euro was down 0.16% on the day at $1.1591, while the pound shed 0.15% to $1.340, as the dollar took a small safe haven boost from remarks by U.S President Donald Trump that the memorandum of understanding on Iran was not final, and that he could resume a bombing campaign if he did not like it
But the big event of the day, the Fed meeting, is still to come, and left investors hesitant to take on large positions. The Fed is widely expected to stand pat at Warsh’s debut meeting. The statement, economic projections and news conference, however, will be scrutinised for any signals of the Fed dropping its easing bias as officials grow more hawkish on inflation risks. “There have been many central banks meeting this month, but this is the one that’s overshadowing everything,” said Jane Foley, head of FX strategy at Rabobank. “There is a lot of uncertainty over what Warsh might signal.
No one is expecting a change in interest rates, but is he going to try and downplay the dot plot? Try and set up a new framework? Try to steer them towards an easing bias?” she said.