New York (ANTARA) – The U.S. dollar soared against a basket of other major currencies late in trading on Thursday, after the Federal Reserve approved another large interest rate hike and announced further hikes to come.
The dollar index, which measures dollar against a basket of six other major currencies, it rose 1.4% to 112.9260.
At the close of trade in New York, the euro was down at US$0.9755 from US$0.9888 in the previous session, and the pound was down at US$1.1165 from 1.1476. US dollar in the previous session.
The US dollar bought 148.24 Japanese yen, higher than 146.96 Japanese yen in the previous session. The US dollar fell from 0.9983 Swiss francs to 1.0124 Swiss francs and from 1.3648 Canadian dollars to 1.3725 Canadian dollars.
On Wednesday (11/2/2022), the Fed raised its benchmark interest rate by 75 basis points for the fourth consecutive meeting, setting the target range for the federal funds rate between 3.75% and 4.00% .
At his press conference shortly after the rate decision, Fed Chairman Jerome Powell said it was “very premature” to think about stopping rate hikes and suggested that interest rates could be higher than initially thought.
Juan Perez, trading director at Monex USA in Washington, said the dollar’s dominance will continue “as thoughts of a recession intensify for the global economy, which will encourage a greater flight to the safety of the dollar”.
On Thursday (3/11/2022), futures markets had forecast US interest rates to peak at 5.15% at the June 2023 meeting, from around 4.9% originally forecast in May.
Meanwhile, the pound fell after the UK’s central bank (BoE) raised its benchmark interest rate but warned of a “very difficult outlook”.
The BoE has raised UK interest rates to 3.00% from 2.25% in the biggest rise since 1989, as it battles the twin forces of a slowing economy and runaway inflation.
The central bank expected inflation to hit a 40-year high of 11% in the current quarter, but pushed back on expectations of further rate hikes. The bank said Britain had entered a recession that could potentially last two years, longer than during the 2008-09 financial crisis.
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This news was broadcast on Antaranews.com with the title: The US dollar soars after the hawkish position of the Fed
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