Dollar little changed with Fed rate outlook in focus
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Aussie and kiwi dip to new troughs

Dec 18 Reuters The U.S. dollar held firm on Wednesday before the Federal Reserve policy meeting later in the session which is expected to deliver a hawkish cut, trimming rates but suggesting less monetary easing ahead.

Analysts recalled that the assumption that the Fed would reduce its level of 2025 easing had propped up the dollar recently, while markets kept pricing a 25 basis point rate cut.

We foresee a hawkish shift in the dot plot, consistent with the movement in market expectations since the last update in September, said David Doyle, head of economics at Macquarie.

Chair Powell is likely to stress a slower pace of easing ahead, uncertainty over the neutral rate, and the data dependence of the policy outlook, he argued, adding that beyond this meeting, he sees just one 25 bps cut in 2025.

The U.S. dollar index , which measures the greenback against six rivals, was up 0.05 at 106.97 after hitting its highest since Nov. 26 at 107.18 on Monday.

We think they will pause cutting rates in January, said Padhraic Garvey, regional head of research, Americas at ING.

It39;s unlikely they telegraph that intention explicitly.

Data on Tuesday yet again showed a resilient U.S. economy after retail sales beat expectations, but investors are also weighing the possible impact of promised tariffs and tax cuts by the incoming Trump…