Dollar fell in American trade on Wednesday against a basket of major rivals, extending losses for the fourth straight session under pressure from the weakening US 10-year treasury yields.
The decline comes ahead of the Federal Reserve’s policy decisions later today, expected to hold interest rates flat.
The Index
The dollar index fell 0.25% to 103.20, with a session-high at 103.68, after closing down 0.1% on Tuesday.
US Treasury Yields
US 10-year treasury yields fell 1.1% today on track for the third decline in a row, plumbing a two-week trough at 3.994%, pressuring dollar.
Such developments came following weak US data that raised the odds of an interest rate cut in March.
Weak Data
Earlier data showed the US private sector added 107 thousand new jobs in January, below estimates of 148 thousand.
US labor costs rose by 0.9% in the fourth quarter of last year, below estimates of 1%.
US Rates
Following the data, the odds for a US interest rate cut at the Fed March meeting rose from 45% to 51.5%.
The Fed
Global markets are waiting for the Federal Reserve’s policy meeting results later today, followed by Fed Chair Jerome Powell’s speech.
There’s a 99% chance the Fed will maintain interest rates flat at 5.5%, already the highest in 23 years.
Thus focus is on the policy statement, and any clues it might contain on the future path of US interest rates.
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