Dollar strengthens after FOMC meeting
2023.01.05 07:30
Dollar strengthens after FOMC meeting
Budrigannews.com – The generally hawkish tone of the minutes of the Federal Reserve’s meeting in December provided some support for the U.S. dollar on Thursday, which resulted in a slight upward movement.
The, which compares the dollar to a basket of six other currencies, was up 0.1% to 104.095 at 03:15 ET (08:15 GMT).
The Fed’s most recent policy meeting, which was released late Wednesday, showed that policymakers were in agreement that the central bank should slow down the rate at which it raises interest rates aggressively. However, they were still keen to emphasize their focus on tackling inflation.
The members of the Fed stated that they wanted to maintain a “restrictive policy stance for a sustained period” until inflation fell steadily to 2%, which was likely to take “some time.”
In a note, analysts at ING stated, “That Fed story will remain a key driver of the dollar and global asset market trends in 2023.” The market has been fairly steadfast in predicting that the Fed will continue to tighten to 4.95/5.00% next spring and summer, followed by a 200-bp easing cycle within two years to maintain a neutral 3% Fed funds rate into 2025. Over the coming weeks and months, there will undoubtedly be challenges to that pricing.”
The Federal Reserve is determined to control inflation, but it wants to do so without triggering a major recession that would cause significant job losses.
Friday’s December report is expected to show that the economy added 200,000 jobs, down from the previous month. However, the weekly report is due later on Thursday, and it will be examined for indications of the current strength of the labor market.
increased by 0.1 percent to 1.0612, despite an unexpected decline in November as high and market uncertainty continue to weigh on Europe’s largest economy despite diminishing supply chain issues.
the yen lost some of its gains since early December as the yen unexpectedly widened the target range for its benchmark yields, leading to speculation that the central bank will end its ultra-loose monetary policy later this year. The price of the yen rose 0.2 percent to 132.82.
fell by 0.4% to 1.2006, and sterling struggled the day after the U.K. Prime Minister promised to cut the British economy in half and boost growth this year.
The nation is currently experiencing a wave of strikes, and confidence is at a low ebb. However, the Office of Budget Responsibility’s most recent forecasts indicate that these objectives are certainly realizable.
After making huge gains in the previous session, the risk-sensitive fell 0.4 percent to 0.6804 and 0.2 percent to 6.8750. The focus is now squarely on a Chinese economic reopening as the country faces a massive rise in COVID-19 infections.
“All eyes are on developments in China and whether the liberalization of COVID containment policies can prompt a re-rating of 2023 Chinese and global growth prospects,” ING added. “Away from the Fed, all eyes are on developments in China.”
More Japan tries to avoid stagflation by raising wages
