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Dollar strengthens

Ag Reuters

TOKYO: The dollar reached a three-week high against the yen and stood tall against the euro on Wednesday ahead of a Federal Reserve policy meeting that could give 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, at which it is widely expected to hike rates for the second time this year.

Market focus is on whether the Fed signals tightening policy four times in 2018, from the three times indicated earlier this year, after the world´s largest economy has expanded steadily. The dollar index against a basket of six major currencies inched up 0.09 percent to 93.888, after rising 0.25 percent the previous day. The dollar was 0.25 percent higher at 110.660 yen after brushing 110.68, its highest since May 23."There are views that the recent emerging markets turmoil could hold back the Fed from quickening the pace of its rate hikes.

So the dollar would benefit if the Fed actually signals readiness to hike four times this year," said Masafumi Yamamoto, chief forex strategist at Mizuho Securities in Tokyo.

The euro was flat at $1.1745 after slipping 0.35 percent overnight. The near-term direction of the euro is likely to be dictated by the Fed session and Thursday´s European Central Bank policy meeting.