The United States dollar, on Tuesday, June 13 closed lower against the euro and the pound, but was firmer against the yen, ahead of the start of the Federal Reserve’s two-day policy meeting that investors expect will conclude with an increase in interest rates.
The ICE U.S. Dollar Index DXY, -0.14% which tracks the buck against a basket of six rivals, shed 0.1% at 97.035. The WSJ Dollar Index BUXX, -0.15% a measure of the greenback against 16 major currencies, was off 0.1% at 88.36.
The dollar was trading marginally better after data showing wholesale inflation eased in May but was still at elevated levels. The 12-month rate of wholesale inflation stood at a 2.4% in May, up from zero a year earlier and just a notch below a five-year high.
Much of Tuesday’s action was taking place in the pound-dollar pair, often referred to as the cable, with the British currency climbing after data showed consumer price inflation in May hit its highest in four years, logging a faster-than-expected rate of 2.9%.
The pound GBPUSD, +0.6951% rose to $1.2724, up from $1.2660 late Monday in New York, after the inflation report, which arrived before Thursday’s Bank of England policy meeting.
Fed gathers ‘round: Before the BOE’s decision is released, the Federal Reserve will start its discussing policy Tuesday and will release its decision on Wednesday.
Traders have been priced in a 95.8% probability that the Fed will raise interest rates, CME Group’s FedWatch showed. Chairwoman Janet Yellen will speak Wednesday.
The greenback USDJPY, +0.04% traded at ¥110.14 on Tuesday, up from ¥109.95 late Monday in New York. But it slipped against the euro, with the shared currency EURUSD, +0.0089% rising to $1.1208 from $1.1204.
In other currency pairs, Canadian dollar USDCAD, -0.6528% strengthened against its Southern rival, extending sharp gains from Monday.
