Early trade in New York: Dollar surges ahead of Fed decision

NEW YORK: The US dollar edged higher on Wednesday, moving within narrow ranges, ahead of a US Federal Reserve policy statement and a speech by President Joe Biden later in the day when the US president is set to announce more stimulus plans.

Though the greenback recovered from a one-month low hit earlier this week, investors expect the US central bank to maintain its policy settings and Fed Chairman Jerome Powell is seen as likely to repeat his dovish message.

In mid-morning trading, the dollar index rose 0.1% at 90.953, bouncing from Monday’s low of 90.679, its weakest level since March 3, though investors were not convinced a recent downtrend had ended.

Investors’ inflation expectations, measured by the break-even inflation rate calculated from US inflation-linked bonds, rose above 2.40% on Wednesday, the highest level since 2013.

The euro slipped 0.1% to $1.2074, off Monday’s two-month high of $1.2117.

The dollar stood at 108.97 yen, up 0.1% on the day, having jumped 0.59% overnight and extending its recovery from a seven-week low of 107.48 touched last week, in tandem with rises in US bond yields.

Elsewhere, the Australian dollar dropped 0.1% to US$0.7759 after the country’s consumer price index came in weaker than expected.