Dollar at near multi-month high after announcement U.S. Federal Reserve

After the U.S. Federal Reserve surprised markets last week by signaling it would raise interest rates and end emergency bond-buying sooner than expected, the dollar held near multi-month peaks against other major currencies today. The dollar index, which tracks this currency against six major currencies, stood at 92.232 after it went up 1.9 percent last week. This is its biggest rise since March 2020.

On Friday, it jumped above key resistance around 91.95, marking a 61.8-percent retracement from its decline to 89.53 earlier this month from an April peak of 93.439.

Chris Weston, head of research at Pepperstone Markets Ltd., a foreign exchange broker based in Melbourne, said: "Like many, I had expected the 61.8 Fibonacci retracement in the dollar index to hold for a bit... and at least see some consolidation. That wasn't to be, and it seems technical resistance means very little when this type of re-positioning event plays out."

The euro traded at $1.1872, having hit a 2.5-month low of $1.1847 on Friday. In Japan, the yen held firmer as the Fed's tilt hit risk asset prices. It ticked up to 110.185 yen to the dollar, pulling away from Thursday's 2.5-month low of 110.825.

The jolt to foreign exchanges was triggered on Wednesday by Fed forecasts showing 13 of the 18-person policy board saw rates rising in 2023, versus only 6 previously, with the median board member tipping two hikes in 2023.

News.cgtn.com reports that, in cryptocurrencies, bitcoin stood at $35,689, while ether changed hands at $2,241, both paring losses made during the weekend to stand little changed from Friday's closing levels.


Photo source: Dreamstime.com


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