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Dollar strengthens against most major currencies after the FED meeting

The US dollar strengthened against most of the major currencies in trading on Thursday.

The ICE-calculated index, which tracks the dynamics of the dollar against six currencies (euro, Swiss franc, yen, Canadian dollar, pound sterling and Swedish krona), rose 0.29% to 91.39 points.

Earlier in the course of trading, the index reached 91.48 points, the highest level in the last two months, writes Trading Economics.

According to analysts, the dollar was strengthened by hawkish signals from the last meeting of the US Federal Reserve System (FRS), which ended on Wednesday.

The Fed kept the federal funds rate in the range from 0% to 0.25% per annum based on the results of the June meeting.

The Federal Reserve also said it will continue to buy back assets totaling $ 120 billion monthly “until significant progress is made towards the goals of maximum employment and price stability.”

These decisions coincided with the forecasts of economists and market participants. Meanwhile, the Central Bank raised its forecast for GDP growth in the country in 2021 to 7% from 6.5% expected in March.

At the same time, the dot plot – a chart that reflects the individual expectations of the members of the Board of Governors of the Federal Reserve and the heads of the Federal Reserve Banks regarding interest rates – showed that seven out of 18 leaders of the American Central Bank did not exclude their increase in 2022.

The majority is expecting an increase in rates in 2023 – 13 people.

“The Fed’s message to the markets was probably more hawkish than many expected,” said IG expert Eap Jun Rong, quoted by MarketWatch.

At the same time, he believes that the different points of view of the members of the Fed’s Board of Governors suggest that “a lot will still depend on how the economy recovers.”

US Central Bank Chairman Jerome Powell, during a traditional press conference after the end of the meeting, was more optimistic about the economic prospects than he was just a few months ago, saying that “we will soon find ourselves in a very strong labor market.”

However, he warned that the Fed will not rush to raise interest rates.

Also Read:

Euro as of 9:25 Moscow time decreased by 0.02% – to $ 1.1993 compared to $ 1.1995 at the close of the previous session.

The exchange rate of the American currency against the Japanese currency is stable at 110.71 yen, as at the close.

This week, investors are also awaiting the results of the meeting of the Bank of Japan, which will be summed up on Friday.

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