European session review: USD appreciates as Fed's policy decision, President Biden's $1.8 trillion "American Families Plan" come in focus

USD advanced against most of its major rivals in the European session on Wednesday as investors assessed the details of the U.S. President Joe Biden's spending plan, while awaiting the release of the Federal Reserve's policy statement.

The U.S. Dollar Index (DXY), measuring the U.S. currency's value relative to a basket of foreign currencies, rose 0.12% to 91.02.

The White House released the details of President Biden's The American Families Plan that "includes $1.8 trillion in investments and tax credits for American families and children over ten years", which are to be funded through tax increases on the wealthy, particularly a hike in the top tax rate on the wealthiest Americans to 39.6 percent from 37 percent currently. Biden is expected to repeat the details of this plan while addressing a joint session of the U.S. Congress later today.

The Fed will announce the outcomes of its April policy meeting today at 18:00 GMT. This event will be followed by a press conference of the Fed’s Chair Jerome Powell half an hour later.

Market participants do not expect the U.S. central bank to make any changes to its monetary policy stance at the meeting, leaving interest rates and asset purchases unchanged to bolster the economy. However, close attention is expected to be paid to the signals of when the Fed might start to reduce its QE program and its inflation outlook. 

Ahead of today's Fed decision,  the benchmark 10-year U.S. Treasury yield increased two basis points to 1.637%.