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.
June 17, 2021
EUR/USD 1.1946 GBP/USD 1.3952 USD/CAD 1.2306 AUD/USD 0.7589 USD/JPY 110.39 USD/CNH 6.4431 USD/ILS 3.2645 USD/MXN 20.4114 USD/CHF 0.9138 USD/INR 74.0800 USD/BRL 5.0273 USD/SGD 1.3390 USD/DKK 6.2251 USD/SEK 8.5061 USD/NOK 8.4936
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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