LONDON, July 27 – The dollar fell off its 20-year high on Wednesday hours before the end of the U.S. Federal Reserve’s monetary policy meeting, at which the central bank is expected to raise rates of interest by another 75 basis points to curb rising inflation.

* But moves in currency markets were modest before the 1800 GMT announcement.

* Money markets are betting that the Fed will raise rates by 75 basis points (bps), with the possibility of a hike of up to 100 bps. Traders expect the central bank to hike rates to 3.4% by the end of the year to help bring inflation back on target.

* Bets on excessive rate hikes helped the dollar index, which measures the dollar against a basket of six currencies, hit its highest level in nearly 20 years earlier this month at 109.29. and the greenback has risen 2.1% in July. At 1055 GMT, the dollar index was down 0.2% at 106.93.

* “Markets are taking a bit of distance ahead of the Fed meeting,” said Simon Harvey, head of currency research at Monex Europe.

* The euro was up 0.33% at $1.0149 but failed to recover from Tuesday’s 1.0% drop, its biggest drop in more than two weeks, after fears of a European recession intensified. when Russia further cut gas supplies to Europe through the Nord Stream 1 pipeline.

* The dollar was down 0.2% at 136.69 yen. Against the safe-haven Swiss franc, the greenback was also down 0.2% at $0.9612.

* As for cryptocurrencies, Bitcoin was stable at $21,301.

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