U.S. dollar recovers ahead of FOMC, ruble rebounds

The U.S. dollar advanced against major currencies on Wednesday ahead of the Federal Reserve’s policy meeting that is expected to show the interest rate hike is still on track.

The Federal Open Market Committee (FOMC) is expected to drop the use of “considerable time” in its language to describe the timeframe of near-zero interest rates in its last policy meeting of the year.

The U.S. dollar rejoiced on those expectations, as higher rates will drive more investment flows into the country at a time when other major economies are cutting their interest rates.

The Dollar Index, which tracks the value of the U.S. dollar against a basket of major currencies, gained 0.57% to 88.46.

EURUSD was down 0.74% to 1.24160, and USDJPY gained 1% to 117.530.

The Euro was also under pressure from comments by European Central Bank policymaker Benoit Coeure that a broad consensus is seen among the ECB’s governing council for more action, which could include buying government bonds.

Against the ruble however, the U.S. dollar declined on views the Russian currency was much undervalued.

The U.S. dollar was down 8.8% against the ruble at 60.515.

The ruble gained strength after the Central Bank of Russia announced fresh measures to support its stability.