US dollar index is rising today, gaining as a two-day Federal Reserve meeting gets under way. It’s been a somewhat dramatic day for trading so far, but right now the US dollar has the upper hand, even though there are expectations that a taper of the Fed’s asset purchase program is still somewhere in the future.
Earlier in the day, the US dollar took a hit against the euro as a member of the ECB made comments that indicate that the central bank isn’t ready to cut interest rates in the name of economic stimulus. As a result, the greenback dropped on the expectation that the euro would likely remain strong.
However, that earlier weakness has disappeared and now the US dollar has the upper hand. In addition to speculating on what the Federal Reserve will announce, many Forex traders are adjusting their positions for the end of the month. Forex traders are trying to prepare themselves for surprises from the Fed, while still taking into account some of the recent predictability.
At 5:21 GMT the dollar index is up to 79.6200 from the open at 79.3380. EUR/USD is down to 1.3744 from the open at 1.3786. GBP/USD is down to 1.6048 from the open at 1.6142. USD/JPY is up to 98.1745 from the open at 97.6710.
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