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Internationally Dollar Index Holds Steady As Fed Decision Looms

The Internationally dollar index held steady around 109.8 on Monday, hovering close to its highest levels in 20 years as investors remained on the sidelines ahead of a big week for central bank decisions, headlined by the Federal Reserve which is expected to deliver another supersized rate hike to tame surging inflation.

Higher-than-expected inflation numbers and solid economic data in the US last week cemented expectations that the Fed will tighten further, and markets are currently priced for a third straight 75 basis point increase, while some analysts are betting on a bigger full percentage point hike.

The US economy also showed relative strength in the face of slowing global growth, making the dollar index attractive for investors looking for safety. Meanwhile, investors remained cautious as other major central banks such as the Swiss National Bank and the Bank of England are also expected to raise interest rates this week, and a hawkish surprise could spur more currency volatility.

While Gold prices weakened below $1,670 an ounce on Monday, extending last week’s sharp decline as investors geared up for a raft of interest rate decisions by major central banks this week, with the US Federal Reserve set to deliver another jumbo rate hike to tame surging inflation. Higher-than-expected inflation numbers and solid economic data in the US last week cemented expectations that the Fed will tighten further, and markets are currently priced for a third straight 75 basis point increase

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