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Sydney - A dollar gauge halted its biggest slide in 2 1/2 weeks before a Federal Reserve decision with traders weighing whether global stocks’ worst rout since 2012 will have an impact on policy makers.
The Bloomberg Dollar Index ended a two-day drop, with the Fed set to release its first policy statement since it raised interest rates from near zero last month. Officials have indicated that they expect four hikes in 2016.
The greenback lost ground on Tuesday against the currencies of commodity producing nations including Canada and South Africa as prices climbed for crude oil, metals and agricultural commodities. Australia’s dollar climbed after data showed quarterly inflation was stronger than economists had estimated for the final three months of 2015.
“What would be important is the tone of the Fed’s statement on what’s been happening recently in the global markets,” said Shinji Kureda, head of FX trading at Sumitomo Mitsui Bank.
“If the statement turns out to be dovish, that has been already priced in, so the risk of dollar-selling may be limited.”
The Bloomberg Dollar Spot Index was up 0.1% at 1 248.89 as of 2:01 p.m. in Tokyo, after falling 0.4% on Tuesday, the biggest decline since January 7. The greenback was little changed at ¥118.26 and $1.0863 per euro.
Australia’s dollar gained 0.2% to 70.18 US cents.
The MSCI All-Country World Index of global equities has dropped 7.7% since December 31, on pace for the worst monthly performance since May 2012. Declines have come amid concern about the ability of Chinese policy makers to maintain growth in the world’s second-largest economy and a price slump for commodities from oil to iron ore.
