The US Dollar declined from its 20-year record high in advance of the US Federal Reserve’s interest rates decision, which is predicted to see a 0.75% rise in a bid to combat soaring 9.4% inflation across the Atlantic.
According to Reuters, traders are betting on a 0.75% increase with an outside chance of a more extreme move to 1%. Expectations are set for interest rates as high as 3.45 by the end of 2022.
It was the outside bets on extreme rate hikes that drove the Dollar to its 20-year high, at which point it reached parity with the Euro earlier in July.
The Dollar index fell 0.2% to 106.93 at 10:55 GMT. Meanwhile, the Euro gained 0.33% to 1.0149, clawing back some ground from its 1% drop on Tuesday after Russia’s threats to lower gas exports through Nord Stream 1 to 20% saw panic flash across Europe.