» Forex - Dollar rose ahead of FOMC and expectation for a “pause” in US interest rate cutting

The Dollar rose to an almost one-month high versus the Euro on Tuesday, buoyed by growing views the Federal Reserve is ready to signal a pause in its interest rate cutting-campaign and by weak European economic data.
Analysts expect the FOMC to cut the benchmark lending rate by 25bp to 2% and indicate a pause for now, after an aggressive exercise that has cut rates by 300bp since mid-September.

While markets are expecting a slightly hawkish tone in the FOMC’s statement accompanying the rate decision, poor economic data from the euro zone raised doubts on the ECB’s ability too maintain its tough stance on inflation and interest rates.

The Sterling was hurt by a warning from policy-maker David Blanchflower that Britain faced a real risk of recession unless the Bank of England took “aggressive” action.

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