Dollar Weakens Ahead of Fed Interest Rate Decision

As the Federal Reserve prepares for its policy update, strategists are anticipating potential fluctuations in the currency market, particularly regarding the Pound Sterling and the U.S. Dollar. Some analysts predict a setback for the Pound against the Dollar, potentially dropping to around 1.2990, as the Fed is expected to keep interest rates unchanged while signaling caution regarding tariff impacts on inflation. Concurrently, the Indian Rupee is facing pressure due to geopolitical tensions and upcoming tariffs from President Trump, although a weaker Dollar could provide some support. The Fed's upcoming decisions will be closely monitored for any shifts in economic projections, particularly in light of rising industrial production and recent economic data. Additionally, the dollar index showed signs of volatility, reflecting uncertainty in the economic outlook ahead of the FOMC meeting. These developments underscore the intricate interplay between U.S. monetary policy and global currency movements.