LONDON—The dollar held around five-week lows on Wednesday, before the conclusion of the Federal Reserve’s policy meeting at which investors will be looking for any insight on what might happen with interest rates given the turmoil in the banking sector.
Markets show a quarter-point rise in U.S. rates is the most likely outcome, but investors will be keen to hear what Chair Jerome Powell says about the crisis that has rattled global banks this month and how carefully the central bank feels it needs to tread.
Markets are pricing in about a 15 percent chance of the Fed not increasing rates, with a roughly 85 percent chance of a 25 basis point hike, according to the CME FedWatch tool. Just a month earlier, the market was pricing in a 24 percent chance of a 50 basis point hike….