Dollar Strengthens Ahead of Crucial Fed Meeting

London: 30 October 2023 (TraderMade): The US dollar has been buoyed by economic strength, including robust consumer spending in September and the fastest third-quarter economic growth in nearly two years. The main focus is on the Federal Reserve, set to convene this week.

While the Federal Reserve is expected to maintain current interest rates when its decision is unveiled on Wednesday, traders remain cautious about signaling higher-for-longer rates due to concerns about overheated inflation.

Latest update on USDX and major currency pairs

The week begins with multiple central bank meetings and significant economic data releases.

At 12:26 GMT, the Dollar Index (USDX), which monitors the dollar against a basket of six other major currencies, traded at 106.259. It closed at 105.4 on 23 October. It shows an increase of 0.815%.

The EURUSD pair closed on 27 October at 1.05666. On 30 October, it was trading at 1.0588. The pair slightly rose (0.20% increase). This comes just days after the European Central Bank concluded the longest streak of interest rate hikes in its history, leaving its policy rate at 4%.

Elsewhere, AUDUSD closed on 27 October at 0.63385. On 30 October, the pair was trading at 0.63688. So, it shows a 0.478% increase.

NZDUSD closed on 27 October at 0.58096. It was trading at 0.58259 on 30 October. So, the pair rose by 0.28%.

However, the GBPUSD closed on 27 October at 1.21254. On 30 October, it was trading at 1.0587. It shows a decline of 12.69%.

Despite concerns about a looming recession, the central bank is expected to maintain current interest rates despite the UK's highest inflation rate among major economies, standing at 6.7% in September.