The United States of America dollar halted its two-week rally on Wednesday, December 14, after a Democrat won a bitter fight for a U.S. Senate seat in deeply conservative Alabama.
This development injected fresh uncertainty about the outlook for the greenback in the coming months.
The dollar .DXY was flat against a trade-weighted basket of currencies at 94.06 on Wednesday after rallying more than 1.5 percent so far this month. Despite the bounce, the dollar is down nearly 8 percent so far this year.
Even as the U.S. Federal Reserve prepares to raise interest rates for the third time this year at the end of a two-day policy meeting in the day, traders are a bit more sceptical that policymakers will flag more rate hikes next year than the current two increases currently priced into markets.
Against the yen, the dollar slipped 0.2 percent to 113.35 yen JPY=EBS, after rising to a four-week high of 113.75 yen on Tuesday.
The euro EUR=EBS was flat at $1.1745, after slipping to a three week low of $1.17175 the previous day.
Investors are focusing more on the Fed’s projection on the pace of its rate hikes next year and policymakers’ views on the outlook for inflation, Reuters reports.
The Fed will announce its decision on rates at 1900 GMT Wednesday followed by a statement. Chair Janet Yellen will hold a news conference at 1930 GMT.
