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Dollar strengthens ahead of Fed meeting

The dollar edged up across the board today ahead of a Federal Reserve policy announcement that investors will scan for clues on how many more U.S. rate hikes there will be this year.

The Fed concludes its two-day policy meeting later on Wednesday and is widely expected to hike rates for the second time this year.

Reports that Fed Chair Jerome Powell was considering holding a news conference and taking questions after every Fed meeting also supported the dollar as it raised expectations that the Fed could hike rates more often. The central bank currently holds a news conference after every other meeting.

May is likely to bow to pressure from pro-Europe rebels in her party for a second day on Wednesday when MPs debate the government’s plans for future customs relations with the European Union.

The government was forced into a major compromise on Tuesday when it had to agree to give parliament a greater role in Brexit negotiations to avert a defeat at the hands of rebels from her own party who want to keep close EU ties after Britain leaves the bloc in March next year.

Two days of debate on the laws that will end Britain’s EU membership have crystallised long-running divisions within May’s party about the best strategy for leaving the EU, bringing to a head issues that will determine the relationship between the world’s fifth-largest economy and its biggest trading bloc.

UK Inflation data this morning came in at 2.4% which is in line with the expectations, there was little market movement after the announcement.

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