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Dollar loses ground after Fed hikes, expects more hikes

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By Sinead Carew

NEW YORK (RockedBuzz via Reuters) – The dollar fell against the yen and the euro on Wednesday after gaining ground as the US Federal Reserve raised interest rates by half a percentage point as expected and said it would have to continue raising rates. taxi.

The greenback reversed course and retreated as Fed Chairman Jerome Powell answered questions. The Fed has forecast at least another 75 basis points of increases in borrowing costs by the end of 2023, as well as rising unemployment and near-stopping economic growth.

Ahead of the Fed meeting, lower-than-expected inflation data had led some investors to hope Powell would strike a more dovish tone at Wednesday’s press conference. But Powell said it was too early to talk about the US central bank cutting interest rates and that the Fed’s goal is to set policy that will bring inflation back to its 2% target over time.

“This is a more aggressive set of communications than markets expected. Politicians have dashed hopes of lasting easing in financial conditions by maintaining previous language saying ‘continuous hikes’ would be needed to put policy on a sufficiently tightening footing.” said Karl Schamotta, chief market strategist at Corpay.

“By raising terminal rate projections to 5.1% and avoiding a steep decline in long-term rate expectations, officials have refused to back down from the ‘higher for longer’ message that has been articulated for months “, he has declared. “On balance, this suggests that we will need to see more conclusive evidence of an easing of inflationary pressures before the Fed ‘turns around’ in any meaningful way.”

The euro rose 0.43% against the dollar to $1.0674. The dollar fell 0.24% to 135.235 yen. The pound rose 0.54% against the dollar to $1.2429.

The dollar index, which measures the greenback against a basket of major currencies, recently fell 0.39%.

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Currency offering prices at 15:29 (2028 GMT)

Description RIC Ultima US Close Pct Change YTD Pct High Bid Low Bid

Previous edit

Session

Euro/Dollar $1.0674 $1.0630 +0.43% -6.10% +$1.0695 +$1.0619

Dollar/Yen 135.2350 135.5700 -0.24% +17.48% +135.9850 +134.5300

Euro/Yen 144.34 144.16 +0.12% +10.77% +144.5800 +143.5500

Dollar/Swiss 0.9239 0.9286 -0.52% +1.28% +0.9296 +0.9216

Pound/Dollar $1.2429 $1.2365 +0.54% -8.07% +$1.2446 +$1.2345

Dollar/Canadian 1.3544 1.3544 +0.01% +7.13% +1.3612 +1.3520

Aussie/Dollar $0.6864 $0.6858 +0.12% -5.55% +$0.6881 +$0.6812

Euro/Switzerland 0.9862 0.9873 -0.11% -4.89% +0.9890 +0.9832

Euro/Pound 0.8586 0.8599 -0.15% +2.21% +0.8616 +0.8577

NZ$0.6449 $0.6463 -0.11% -5.68% + $0.6469 + $0.6404

Dollar/Dollar

Dollar/Norway 9.7310 9.7885 -0.66% +10.38% +9.8040 +9.7205

Euro/Norway 10.3841 10.3788 +0.05% +3.71% +10.4320 +10.3406

Dollar/Sweden 10.1658 10.2191 +0.04% +12.71% +10.2515 +10.1524

Euro/Sweden 10.8446 10.8402 +0.04% +6.03% +10.8852 +10.8405

(Additional reporting by Saqib Iqbal Ahmed and Alden Bentley in New York, Alun John and Amanda Cooper in London, Ankur Banerjee in Singapore; Editing by Alexander Smith, Kirsten Donovan, David Evans and Cynthia Osterman)