The United States of America dollar, on Wednesday, May 2, consolidated gains on after hitting a 3-1/2 month high in the previous session.
This is coming as investors waited for the outcome of a U.S. Federal Reserve policy meeting at which policymakers may outline the future path for interest rates.
Against a basket of its rivals .DXY, the dollar surged past its 200-day moving average on Tuesday, a level it hasn’t traded above since May 2017, and a level which typically attracts some reassessment from large institutional investors on their dollar positions, according to Morgan Stanley.
On Wednesday, it was trading flat at 92.39 after hitting a Jan. 10 high of 92.57 in the previous session.
Market expectations are for nearly three more rate hikes until January 2019.
Elsewhere, the euro EUR=EBS received some reprieve after posting its biggest weekly loss in more than two months last week after data showed the euro zone’s economy slowing as expected in the first quarter of 2018.
The British pound GBP=D3 edged 0.3 percent higher at $1.3656 as a construction survey came in stronger than expected. Sterling fell to a four-month low of $1.3588 on Tuesday.
Other currencies which have borne the brunt of the dollar’s rally in the last two weeks such as the Australian dollar, Canadian dollar and the Swiss franc stabilized on Wednesday, rising around 0.2 percent.