The US Dollar strengthens in anticipation of a potential hawkish pause by the Federal Reserve.

• The US Dollar is gaining against most major counterparts, posting a notable surge against the Turkish Lira.
• Market participants are evaluating the potential impact of the upcoming Federal Reserve rate decision.
• Meanwhile, the US Dollar Index remains range-bound between 103.00 and 104.00.

The US Dollar Index (DXY), which measures the USD’s performance against six major currencies, edges higher to 103.60 as of Wednesday. The Greenback’s strength follows a sharp surge of over 5% against the Turkish Lira (TRY) after reports emerged that authorities had detained Istanbul Mayor Ekrem Imamoglu—President Tayyip Erdogan’s main political rival—on charges including corruption and aiding a terrorist group.

On the economic front, market activity remains subdued ahead of the Federal Reserve’s (Fed) interest rate decision later in the day. The Federal Open Market Committee (FOMC) is set to announce its policy rate decision alongside an update to the Summary of Economic Projections (SEP). Following the meeting, Fed Chairman Jerome Powell will hold a press conference. Against the backdrop of Trump-era policies, investors will be closely watching for indications on how many, if any, rate cuts Fed officials anticipate for 2025 and beyond.

Equities exhibit a mild risk-on sentiment, with European indices and US futures trading higher, albeit with average gains of less than 0.50%.

The US 10-year yield hovers around 4.29%, maintaining stability for the day after rebounding from its near five-month low of 4.10% recorded on March 4.