US Dollar Flat Ahead of Expected Fed Rate Hike
The US dollar remains relatively steady versus major currencies, as investors await results of the FOMC meeting. The meeting of the Fed will be accompanied by the publication of updated macroeconomic forecasts and press conferences. Ahead of the meeting, the 2-year Treasury note yield Tuesday rose to 2.84%, its highest level since 2008. The 2-year most reflects Fed policy but the 10-year was also moving higher, touching just below its year high of 3.12%.
The markets expect a 25 bps rate hike. Currently rates markets are suggesting a near- 80% chance of an additional hike before the end of the year (in December). The focus will be on updated macroeconomic forecasts, which will include the first forecast for 2021, as well as comments by the regulator's head.
New Zealand dollar rose after the publication of data on the index of sentiment in business circles of New Zealand. The kiwi rallied as much as 0.6% versus the US dollar. In September, the value of the indicator remained negative (-38.3 points), but much better than in August, when a ten-year minimum was reached (-50.3 points).