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U.S. Dollar Falls Ahead of Fed Rate Decision

Investing.com - The U.S. dollar was lower on Wednesday as traders waited for clues on whether or not the Federal Reserve is turning more dovish.

The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was down 0.2% to 96.968 by 10:49 AM ET (14:49 GMT).

Ongoing trade tensions between the U.S. and China, which have slowed global growth and put downward pressure on inflation, have increased the case for the Fed cutting rates this year.

The central bank is expected to keep rates unchanged this week, but markets have priced in an 80% chance of a rate cut in July. Traders will be scanning the Fed's statement for clearer hints about the size and timing of any future moves, as well as poring over the central bank’s economic projections.

Fed Chairman Jerome Powell will hold a press conference at 2:30 PM ET (17:00 GMT).

The dollar was flat against the safe-haven Japanese yen, with USD/JPY at 108.42.

Elsewhere, the euro was stronger on the weak dollar, with EUR/USD up 0.2% to 1.1210, while sterling surged, with GBP/USD up 0.6% to 1.2626. USD/CAD fell 0.1% to 1.3357.

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