Currency movements today ahead of this week's interest rate decisions by some central banks

The US dollar fell today but is still trading above its five-month low against major currencies on Tuesday, as investors await the latest economic forecasts from the Federal Reserve on Wednesday amid concerns about the impact of escalating global trade tensions, and expectations indicate that the Fed will fix interest tomorrow, and markets are currently pricing about 60 basis points of cuts, a little more than two cuts, for the rest of the year.

Fears that US President Donald Trump's aggressive tariff policies will lead to a broader economic slowdown have undermined the dollar amid a series of pessimistic polls on sentiment.

EUR/USD

The euro is also trading at its highest levels this week, ahead of the expected vote on Germany's massive stimulus proposal.

The German Constitutional Court on Monday rejected new appeals from opposition parties against the coalition government's plan to pass a massive public borrowing initiative through the outgoing parliament.

The decision paved the way for Parliament to convene on Tuesday to consider the matter.

AUD/USD

The Australian dollar pair settled around 0.6390 US dollars after rising to its highest level in almost a month on Tuesday.

The Australian central bank also said on Tuesday that it remains more cautious than the market about the prospects for further easing of monetary policy, after it cut interest rates for the first time in more than four years last month.

USD/JPY

The yen has fallen strongly over the past period as the risk aversion situation has subsided.

As we wait for the dawn of tomorrow, Wednesday, the interest rate decision from the Bank of Japan, the expectations of fixing the interest rate unchanged.

Despite the readiness of the markets to raise interest rates further this year, the yen may fall further if the Bank of Japan leans towards an accommodative policy in its statements with the interest rate being fixed unchanged on Wednesday.

The bank is also expected to discuss the severity of the escalating US trade war on the Japanese economy.

The Fed, along with the Bank of Japan and the Bank of England, are among the few central banks expected to keep interest rates steady at their meetings this week, keeping markets focused on any future guidance from officials.