The dollar index fell toward 106.5 on Wednesday and was on track to fall for the fourth straight session, as expectations of a supersized 100 basis point rate hike at next week’s Federal Reserve meeting eased, while other major central banks grew increasingly hawkish to curb surging inflation. The US central bank is on track to raise interest rates by another 75 basis points next week after pushing back against expectations of a bigger full percentage point increase.
Meanwhile, European Central Bank officials are considering a bigger 50 basis point rate hike on Thursday to get ahead of inflation, according to a Reuters report. Reserve Bank of Australia Governor Philip Lowe also warned on Wednesday of upside risks to inflation and signaled more policy tightening ahead, while Bank of England Governor Andrew Bailey said on Tuesday that a 50 basis point rate hike will be considered at next week’s meeting.