Dollar strengthens ahead of Federal Open Market Committee meeting

The U.S. dollar has shown strength as the market prepares for the Federal Reserve (Fed) meeting later today. Early European trading was marked by caution after the Turkish lira suffered significant losses. The lira hit a record high against the dollar at 42 but later fell back to around 38, still up nearly 4% on the day. This sharp movement in the lira prompted traders to seek safety in other currencies, including the dollar and Japanese yen. In the foreign exchange market, the euro also faced pressure. The EUR/USD pair dropped to 1.0875 but later recovered to 1.0915. Similarly, the euro against the Swiss franc also fell before bouncing back to 0.9590. The USD/JPY pair moved in response to comments from Bank of Japan (BOJ) governor Ueda, reaching 150 before dropping back to 149.75 as traders reacted to the overall risk sentiment. Commodity currencies are lagging behind. The Australian dollar is down 0.4% against the U.S. dollar, currently trading around 0.6335. In U.S. equity markets, futures initially dipped but now reflect a slight gain of 0.2%. However, the overall sentiment remains cautious as investors await more direction from Wall Street and the Fed. Gold prices are rising, reaching around $3,040 as buyers remain active. Overall, as the Fed’s meeting draws closer, market participants are keen to see how the federal economic policies will unfold.