2023.03.2120:31:00UTC+00Dollar Turns In Mixed Performance Ahead Of Fed Rate Decision

After staying firm in the Asian session, the U.S. dollar retreated on Tuesday and despite recovering from the session's lows, turned in a sluggish performance ahead of the Federal Reserve's monetary policy announcement.

The Fed began its two-day meeting later today and will announce the policy decision on Wednesday.

The central bank is expected to raise interest rates by 25 basis points 4.75-5%.

The Fed will also release its latest dot-plot projections on interest rates, inflation, unemployment and economic output.

Concerns over the banking crisis ebbed as investors digested a forced takeover of Credit Suisse by UBS over the weekend.

The dollar index, which climbed to 103.52 in the Asian session, dropped to 103.00 but recovered as the day progressed, and was last seen at 103.20, down just marginally from the previous close.

Against the Euro, the dollar weakened to 1.0770, easing from 1.0723.

The dollar is gaining against Pound Sterling, firming to 1.2220 from 1.2277.

Against the Japanese currency, the dollar has strengthened to 132.49 yen, rising from 131.32 yen.

The dollar is firm against the Aussie at 0.6671. Against Swiss franc, the dollar has shed ground, dropping to CHF 0.9225 from CHF 0.9290.

The dollar is up against the loonie, fetching C$ 1.3714 a unit. The annual inflation rate in Canada fell to 5.2% in February of 2023, the least since January 2022, slowing from the 5.9% in the previous month amid significant base-year effects.

On a monthly basis, the Canadian CPI rose by 0.4%, slowing from the 0.5% increase in the previous month.