Dollar Broadly Higher ahead of Fed

The US Dollar pulled away from Wednesday's 2 ½ week trough on the backs of a collective sigh of relief that the US midterms are finally over. FX investors are instead turning their focus to today's monetary policy meeting at the Federal Reserve Bank. The latest poll of economists and analysts show that they expect the Fed to maintain rates at their current levels but could signal some tightening next month. That is generally in line with markets which are pricing in an 80% likelihood that the Fed will soon move toward a tighter rate environment.

As reported at 11:24 am (GMT) in London, the EUR/USD was trading lower at $1.1415, down 0.14% and off the session trough of $1.14120; the peak for the session was at $1.14449. The GBP/USD was trading at $1.31, a loss of 0.30%; the pair has ranged from $1.3088 to $1.3150 in today's session. Against the safe haven Japanese Yen, the USD/JPY pair was trading higher at 113.724 Yen, a gain of 0.186%.

Draghi Also in Focus

While the Fed is likely to be the primary focus for FX market, traders will also watch for any signs or clues from the head of the European Central Bank, Mario Draghi, who will be speaking later today at a forum in Ireland. Yesterday, Mr. Draghi met with the Finance Minister of Italy yesterday and encouraged him to ensure a high degree of fiscal discipline to rein in the country's over-extended debt. The issue of sovereign debt in Italy could weigh on the Euro, especially if debt rating agencies decide to downgrade their debt.

Barbara Zigah is a freelance journalist living in Ghana, who specializes in Forex-related content; her online work has appeared in the IB Times, NASDAQ, Benzinga, and Seeking Alpha.