The dollar index hovered around 103.3 on Wednesday as investors awaited the Federal Reserve's latest policy decision, with the central bank widely expected to keep interest rates unchanged.

Market focus will be on the Fed's quarterly updates on rate projections and its outlook for growth, inflation, and unemployment. Meanwhile, the dollar remained near five-month lows as President Donald Trump's aggressive tariff policies fueled economic uncertainty. Treasury Secretary Scott Bessent told Fox News that while the US economy remains fundamentally strong, he could not rule out the possibility of a recession.

The greenback also faced pressure from a strengthening euro after Germany's parliament agreed on a major debt reform to boost spending on defense and infrastructure.

Source : Trading Economics