Dollar drops on Fed decision

Dollar drops on Fed decision

Dollar drops on Fed decision

 The U.S. Dollar Index that tracks the greenback against a basket of other currencies edged up 0.15% to 104.780 by 12:57 AM ET (4:57 AM GMT).

The USD/JPY pair jumped 0.42% to 134.30. The Bank of Japan will also hand down its policy decisions on Friday.

The AUD/USD pair edged up 0.15% to 0.7013, and the NZD/USD pair edged up 0.14% to 0.6293.

The USD/CNY pair edged down 0.18% to 6.7015, while the GBP/USD pair fell 0.24% to 1.2147.

The U.S. Federal Reserve raised interest rates by 75 basis points Wednesday to tame inflation after the U.S. consumer price index rose 8.6% in May, the largest since 1994.

 

Fed comments

The Fed Chair Jerome Powell said the central bank would deliver another big hike in July, but today’s 75 basis-point increase is vast, and he does not expect moves of this size to be shared.

The Fed will forcefully do whatever it takes to reduce inflation, and the terminal rate will be closer to 4% and maybe even higher. Northern Trust Asset Management director of short-duration fixed income and head of credit research Peter Yi told Bloomberg.

The Fed is on a path to higher rates, and even as Powell tried to downplay another 75 basis points hike next month, he said rates are still meager.

The Fed also said it would shrink its balance sheet by $47.5 billion a month, starting from June 1 and increasing to $95 billion in September.

Investors now await policy decisions from the Bank of England (BOE), which are due later in the day.

On the data front, U.S. housing starts and initial jobless claims are due later in the day.

Sending
User Review
0 (0 votes)

RELATED POSTS

Leave a Reply

tmn-img-28-1

Share this on

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn

Rec­om­mended for You

Subscribe to Our Newsletters

Have The Best Of Trade Market News Delivered Directly To Your
Mailbox. Subscribe To Receive The Latest Market News.