Dollar Investors Contemplate Fed’s Decision

On Thursday morning in Asia, the dollar was down, with the U.S. Federal Reserve compressing its monetary policy in a hawkish pivot.

The U.S. Dollar Index follows the dollar against a basket of other currencies that bounded down 0.13% to 96.360 by 10:39 PM ET (3:39 AM GMT).

The USD/JPY pair crept up 0.09% to 114.11.

The AUD/USD pair was down 0.13% to 0.7158, with jobs data from the Australian Bureau of Statistics indicating that the employment change was at 366,100, the entire employment change at 128,300. The unemployment rate was 4.6% in November.

The NZD/USD pair was under 0.19% to 0.6765.

The USD/CNY pair was even at 6.3675, and the GBP/USD pair crept down 0.08% to 1.3252.

On Wednesday, the Fed will accelerate its asset tapering program to $30 billion per month in its policy decision conference. The central bank kept its interest rate intact. However, it will have three quarter-point interest-rate boosts in 2022. Moreover, another three in 2023, and two more in 2024 to attack inflation.

According to Fed Chair Jerome Powell, the economy no longer needs increasing policy support. He resembled the near-depression situation at the beginning of coronavirus in 2020 with rising prices and wages and rapid improvement in the job market.

Investors Waiting for ECB

Investors are now examining policy decisions from the European Central Bank (ECB) and Bank of England (BOE) later in the day. At the same time, the Bank of Japan will arrive on Friday.

The ECB should complete its Pandemic Emergency Purchase Program. However, investors are still gambling that the central bank will not roam interest rates just yet.

The BOE is trying to tackle inflation and calm worries regarding the fast-spreading omicron variant. U.K. data on Wednesday revealed that the consumer price index (CPI) rose 5.1% year-on-year in November, its most heightened level in a decade. The CPI rose 0.7% month-on-month.