Currency markets react to hawkish Fed

Currency markets react to hawkish Fed

Yesterday's highly anticipated Fed meeting prompted market action as comments showed that officials anticipate two rate hikes for 2023 a surprise to many. The central bank also moved its inflation target and Chairman Jerome Powell announced that the group would begin discussions to scale back bond purchases. The US dollar is trading higher on this news, hitting levels not seen in almost 2 months.

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  • FX Rates
    June 17, 2021

    Rates are not real time. Rates are today's indicative mid-market rates as of time of publishing, which may vary. Please contact SVB for a current quote.


  • USD

    The US dollar strengthened following the Fed meeting yesterday where some officials moved forecast for inflation and suggested two rate hikes for 2023. The Bloomberg spot index traded 0.4% higher the strongest since April 14.

    GBP

    Sterling is trading lower on broad US dollar strength. Comments from the Bank of England’s Chief Economist, Andy Haldane, stated that the local economy is close to pre-Covid output.

    EUR

    EURUSD broke below 1.20 hitting a low of 1.1936 a level not seen since April 13. The currency pair extended losses after comments from European Central Bank chief economist Philip Lane toned down the significance of a conversation around tapering for the central bank’s upcoming meeting in September.  

    CAD

    The Canadian dollar traded at its weakest levels in six week with USDCAD breaking above the 1.23 level. The announcement from the Fed regarding interest rate hikes has supported the US dollar broadly.

    ASIA/PACIFIC

    The Japanese yen touched its weakest point in 11-weeks following yesterday's hawkish Fed commentary. This morning the yen reversed some of its losses and is now trading near the session low of 110.43.

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Cate Camerota
WRITTEN BY
Cate Camerota

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