The dollar was seeing some volatility as traders reacted to US economic data releases. However, it lacked a clear direction with attention turning toward the Federal Reserve meeting today to ascertain monetary policy outlook. In this regard, traders continue to speculate about the start of interest rate cuts next year, which is currently expected in May. The focus could remain on Jerome Powell’s comments in addition to the Federal Reserve’s dot plot and economic projections.

The pound was weighed by disappointing data on GDP and manufacturing data, exacerbating concerns about economic conditions. As a result, the Bank of England could face a dilemma during its meeting tomorrow between curbing high inflation and avoiding a recession. The euro could also face some risks ahead of the European Central Bank meeting tomorrow along with the Swiss Franc with the Swiss National Bank taking a stance on interest rates as well.

The yen exhibited some volatility against the dollar as well, as caution prevails ahead of today's Fed meeting. The market is coming to terms with the possibility that the Bank of Japan could still be far from putting an end to its loose monetary policy. As a result, the yen could be exposed to renewed pressures after the recovery it recorded during the last few weeks.

Source: London Loves Business