Dollar's Volatile Dance Amid Fed Meeting and Trade Talks

The U.S. dollar gained ground against the yen and the euro on Wednesday, as markets eagerly anticipated the Federal Reserve's policy meeting outcomes. With traders anxiously eyeing possible shifts in interest rates, the ongoing trade negotiations between the U.S. and China continue to loom large, casting a shadow of uncertainty over economic sentiment.

During this period of unsettling market conditions, Marvin Loh, senior global market strategist at State Street, noted that the dollar has been fluctuating within a trading range. While the Federal Reserve's decision is not expected to drastically alter this trend, potential U.S.-China trade deals may significantly influence future market dynamics.

Adding to the mix, U.S. Treasury Secretary Scott Bessent and chief trade negotiator Jamieson Greer are set to meet China's economic leader, He Lifeng, for critical discussions. Meanwhile, currency markets remain cautiously optimistic, buoyed by steady demand for U.S. Treasuries despite trade-related disruptions.

(With inputs from agencies.)