Fed Expected to Hold Rates Steady, Offering Little Support to U.S. Dollar, Says UniCredit

According to a report by PANews, UniCredit Bank foreign exchange analyst Roberto Mialich anticipates that the U.S. Federal Reserve will keep interest rates unchanged during its upcoming policy meeting on Wednesday—an outcome that is unlikely to provide much support for the U.S. dollar.

Mialich pointed out that Fed Chair Jerome Powell had previously emphasized the need for more clarity on the potential economic and inflationary effects of tariffs before making any significant policy shifts. This cautious stance has contributed to persistent weakness in the dollar index.

Market sentiment reflects growing skepticism about the dollar’s near-term prospects. Options market activity continues to lean toward bearish bets, indicating that many investors expect the dollar to decline rather than rebound.

UniCredit Bank maintains its forecast that the euro and U.S. dollar will continue to trade near the 1.13 level in the short term, reflecting a stable, albeit subdued, outlook for the currency pair.