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Dollar Index Hits 99.69 as Yen Holds Steady Ahead of Fed Decision

By Markets Desk · 2026-09-17 · 2 min read
A stack of metallic coins resting on a wooden desk next to a globe
Illustration: Tradingbird

The US dollar index rose 0.1% to 99.69 on Wednesday. The currency marked its sixth consecutive daily gain. Traders await the Federal Reserve's first rate hike in three years.

The US dollar extended its winning streak on Wednesday, posting a sixth straight daily gain. The broad dollar index climbed 0.1% to 99.69 at 16:45 GMT. This level places the greenback near recent highs. Market participants are positioning for the Federal Reserve's upcoming policy move.

Asian currencies traded in a mixed session. The Japanese yen remained stable ahead of the central bank decision. The British pound fell 0.2% following inflation data. Consumer price growth in the UK accelerated in August. The highest annual rate since March was recorded. This data pressured the sterling against the dollar.

Fed Hike Expectations Drive Yields

The Federal Open Market Committee is expected to raise rates by 25 basis points. This would be the first hike since July 2023. It marks the first policy change since a cut in December. The personal consumption expenditures price index showed 3.7% year-over-year growth. This figure remains well above the 2% target. The PCE index has exceeded the target for 65 consecutive months.

US Treasury yields reached multi-year peaks in recent weeks. The 10-year yield hit its highest level since April 2007 on Tuesday. The 30-year yield set a record high for over 24 years. A sell-off in bonds began after three regional Fed presidents dissented in July. They argued for a rate increase at that time. Concerns over fiscal debt and AI infrastructure costs added to the pressure.

Market Focus On Warsh Guidance

Investors are watching the Fed’s Summary of Economic Projections closely. They seek clues on whether this is a one-time hike. The CME FedWatch tool indicates expectations for at least one more move this year. Fed Chair Kevin Warsh will hold a press conference after the decision. Traders want to know if he will provide forward guidance. Warsh sounded hawkish at the Jackson Hole conference in August.

Brent Wilsey of Wilsey Asset Management noted the pressure from bond markets. He stated that the funds rate is unusually low relative to yields. A decision to hold rates steady would be a surprise. Such a move could damage the Fed’s credibility. It might reignite concerns about political pressure from the White House. President Donald Trump has publicly urged for lower rates.

Sterling Slides On Inflation Data

The British pound lost 0.2% of its value against the dollar. This decline followed the release of August consumer inflation figures. The annual CPI growth rate accelerated to its highest level since March. The data suggests persistent price pressures in the UK economy. This contrasts with the mixed performance of other Asian currencies. The dollar’s strength overshadowed regional gains in the broader market.

Based on reporting by Investing.com UK, compiled by the Tradingbird desk.

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