Dollar hovers near eight-month low ahead of Fed's meeting

Dollar fell in European trade against a basket of major rivals, resuming the gains after a hiatus that pushed the greenback near eight-month lows under pressure from a reduced 0.25% rate hike by the Federal Reserve. 

The Fed is convening tomorrow and issuing decisions on Wednesday, with markets fully pricing 0.25% rate hike, down from 0.5%. 

The Index

The dollar index fell 0.3% to 101.65, with a session-high at 102.04, after closing up 0.1% on Friday, the second profit in a row away from eight-month lows at 101.50. 

The index lost 0.1% last week, the third loss in a row amid a continued selloff pressure. 

Interest Rates 

Odds for a 0.25% rate hike by the Fed this week stand at 99.9%, after the Fed already reduced its rate hikes from 0.75% to 0.5%. 

The Fed

Fed Chair Jerome Powell will speak on the future of interest rates and policy meetings following the official meeting on Wednesday, and will provide important clues on the path ahead. 

A bearish statement from Powell will hurt the dollar even more and send it to year lows.