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US stock-index futures were in the black on Wednesday on the heels of the longest losing streak since November for the S&P 500, with investors awaiting a Federal Reserve statement and a batch of economic data.
The Fed is expected to hold its benchmark rate steady after raising it by a quarter point at its December meeting. Wall Street economists said they would pay close attention to any clues on how central bankers have interpreted US President Donald Trump’s fiscal policy pledges, and the generally upbeat economic data that has been released since the last meeting.
Traders reckon that the US dollar, which has pulled back this year after a sharp rise at the end of 2016, could be shaken-up by the Fed statement.
“Recent Trump protectionist rhetoric has been dollar negative, with risk appetite also waning and we attribute this to a closing out of positions in classic ‘Trumpflation’ trades,”
said currencies strategists at ING.
“Yet, we suspect the dollar’s sell-off could come to a halt today as subtle hawkish tweaks in the February FOMC statement drives the US curve higher”.
The dollar index, a measure of the greenback against a basket of six peers, was recently little changed after reaching the lowest level since December on Tuesday.
In fixed income, the yield on the 10-year Treasury note edged higher by 1.7 basis points to 2.47 per cent. The policy-sensitive two-year yield was up by 1.2bps to 1.217 per cent.
Elsewhere on the economic docket is the closely-watched Institute for Supply Management report that provides a snapshot of the US factory sector. Data on private-sector payrolls are also due out, ahead of the important monthly jobs report that is slated for release on Friday.