Ready to 'Fight' FOMC Time? Read Here First!

<p>The US dollar declined slightly in the European session when all focus is now on the Federal Reserve (Fed) which will make its latest interest rate decision.</p><p><br /></p><p>At the time of writing, the dollar index, which measures the greenback's strength against a basket of major currencies, was trading lower at 101.13.</p><p><br /></p><p>Currency markets placed expectations for another hike of 25 basis points by the Fed, but were divided on the next hike.</p><p><br /></p><p>Fed Chairman Jerome Powell will offer a hint on that in a follow-up statement after the decision.</p><p><br /></p><p>If there is a change in the 'tone' of the central bank, it can induce 'crazy' market movements.</p><p><br /></p><p>Looking at major currency trading, the euro recovered slightly from its previous decline to trade steady at around 1.1070 against the US dollar.</p><p><br /></p><p><br /></p><p>Investors are also looking forward to the European Central Bank's (ECB) policy meeting tomorrow, where it is expected to raise rates by 25 basis points.</p><p><br /></p><p>Still, ECB President Christine Lagarde's speech could be the next clue to the central bank's future policy, not to mention amid a deteriorating European economy.</p><p><br /></p><p>Meanwhile, the pound remained stable at around 1.2900 against the greenback after recording a strong daily gain on Tuesday.</p><p><br /></p><p>On the other hand, Aussie and New Zealand dollar trading remained limited after Australian inflation data showed a decline and supported expectations for the central bank to ease its tightening.</p><p><br /></p><p>The Canadian dollar also posted limited trading amid flat crude oil prices.</p><p><br /></p><p>In addition, the yen also made gains following the depreciation of the greenback dollar. The International Monetary Fund (IMF) suggests Japan's central bank is gearing up for tightening.</p>