US dollar higher ahead of Fed meeting

[NEW YORK] The US dollar pushed higher against the euro and pound but flat against the yen on Monday ahead of the Federal Reserve's two-day policy meeting.

The greenback rose to US$1.1103 against the euro and US$1.4306 on the pound.

Analysts don't expect the Fed to announce a rate increase at the conclusion of the meeting on Wednesday.

The Fed is likely to deliver a cautious, hedged message that will cite the need to see more data on US growth and point to the weakness of the global economy.

But many say the Fed could display enough confidence in the US economy and a pickup in inflation that will signal an increase likely in the coming months.

"The Fed has raised rates once in this newest rate-tightening cycle, and now expectations for future rate increases in 2016 have been cut to two from four," said Sam Stovall at S&P Capital IQ.

"No hike next week, but almost certainly guidance suggesting a hike in April," said Chris Low of FTN Financial.

The Bank of England, meanwhile, was expected to leave its main lending rate at 0.50 per cent at its Thursday meeting.

The dollar was essentially unchanged at 113.78 yen as the Bank of Japan met on monetary policy amid some signs of strength.

Japanese machinery orders - a key leading indicator for the economy - jumped 15.0 per cent on a monthly basis in January, offering some rare good news for the slumping economy.

AFP