Investing.com – The U.S. dollar was flat on Tuesday in Asia ahead of the Federal Reserve decision due Wednesday.
The U.S. Dollar Index that tracks the greenback against a basket of other currencies last traded at 96.545 by 11:56 PM ET (04:56 GMT), down 0.01%.
The index was little changed as traders awaited a widely expected Federal Reserve rate hike due Wednesday, though markets will likely focus more on the central bank’s expectations about rate hikes for the upcoming year, with many predicting a more dovish outlook.
In September, the Fed projected three rate increases for next year, but some are expecting the Fed policymakers to signal just two rate hikes for next year as global growth continued to wobble.
“We are expecting a dovish hike by the Fed. The data has not been tepid enough for the central bank not to hike in December,” said Rodrigo Catril, senior currency strategist at NAB.
U.S. President Donald Trump said in a tweet overnight that it was ‘incredible’ that the Fed is even considering raising rates considering the recent weakness in the global growth.
Meanwhile, the USD/CNY pair was also flat at 6.8975 as investors kept a close watch on a major speech delivered by Chinese President Xi Jinping on Tuesday morning on the 40th anniversary of China’s “reform and opening up.”
“No one is in a position to dictate to the Chinese people what should or should not be done,” Xi said during the address.
He then called for China to “stay the course” on its current path of reform.
The People’s Bank of China (PBOC) set the yuan reference rate at 6.8854 vs Monday’s fix of 6.8908.
The yen rose against the U.S. dollar, as the USD/JPY pair edged down 0.3% to 112.53 after Japan’s Cabinet Office revised down its economic growth forecast for 2018 to 0.9% compared with the previous projection of 1.5% increase.
In fiscal 2019 the economy will expand 1.3%, also down from the previous forecast of 1.5% growth, it added.
The AUD/USD pair rose 0.2% to 0.7191 as the Reserve Bank of Australia struck a slightly dovish tone in the minutes of its last policy meeting this year.
“The outlook for household consumption continued to be a source of uncertainty because growth in household income remained low, debt levels were high and housing prices had declined,” the central bank said Tuesday in Sydney. “Members noted that this combination of factors posed downside risks.”