The US Dollar Index (DXY) rose 0.2% to 102.22 on Tuesday (October 27), as investors adjusted their positions ahead of a series of central bank decisions this week. The Federal Reserve is set to announce its decision on Wednesday, followed by the European Central Bank (ECB) on Thursday and the Bank of Japan on Friday.
All three central banks are expected to keep interest rates unchanged. Consequently, market attention will focus on the statements and policy guidance from each institution, seeking clues regarding the economic outlook and the future trajectory of interest rates.
Against the euro, the dollar strengthened, with the EUR/USD pair falling 0.25% to US$1.1144. The euro has been the worst-performing G10 currency in October, weakening by approximately 1.65% against the dollar, driven by high energy costs, volatility in French bonds, and concerns regarding the country's fiscal situation.
Meanwhile, the USD/JPY pair rose 0.15% to 157.73, even though the yen had been one of the best-performing currencies just last week. Japanese Finance Minister Satsuki Katayama reiterated that the government remains prepared to take decisive action in the foreign exchange market to support the yen.
Sterling weakened 0.16% to US$1,3317, while the New Zealand dollar strengthened 0.33% to US$0.5699. The Canadian dollar fell 0.14% against the greenback to C$1.404, ahead of policy decisions from the Reserve Bank of New Zealand (RBNZ) and the Bank of Canada—both of which are expected to raise interest rates on Wednesday.