Dollar lower ahead of US Fed interest rates decision

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.

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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.

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