LONDON, May 1 Reuters The dollar edged towards its highest level this year against a basket of peers and U.S. share futures dipped on Wednesday ahead of a Federal Reserve policy decision, though trading was thin with many European and Asian markets closed.

The dollar gained over 0.5 on Tuesday on the six currencies that make up the dollar index, and the gauge rose as high as 106.49 on Wednesday, a whisker off its highest since November.

The euro steadied but was under pressure at 1.0670, not far from its mid April, fivemonth lows, while the pound was at 1.2478.

The latest move higher in the dollar came after hotterthanexpected firstquarter U.S. employment cost growth on Tuesday, which sent Treasury yields higher and caused markets to further pare bets on Fed rate cuts this year.

Traders are currently only pricing in one rate cut in 2024.

The Fed is almost certain to hold its benchmark overnight interest rate steady later in the day, but a policy statement issued at 1400 EDT 1800 GMT and Chair Jerome Powell39;s press conference half an hour later should provide insight into how deeply if at all a stretch of three lost months in the inflation battle has affected the likelihood that borrowing costs will fall any time soon.

It39;s pretty clear from the way that the data has been that we39;re going to see a focus shift from the last Fed meeting, the question is the extent to which Powell has already previewed the shift of rhetoric when he last spoke, said Michael…