The dollar fell on Thursday as the Fed delivered what many thoughts to be its final rate hike, while market attention switched across the Atlantic to the European Central Bank's (ECB) rate decision later in the day. Interest rates was hiked by the Fed by 25 basis point on Wednesday. As predicted, this has marked …
The dollar fell on Thursday as the Fed delivered what many thoughts to be its final rate hike, while market attention switched across the Atlantic to the European Central Bank’s (ECB) rate decision later in the day. Interest rates was hiked by the Fed by 25 basis point on Wednesday. As predicted, this has marked the central bank’s 11th rate hike in the last 12 meetings held. While Fed Chair Jerome Powell left ideas on probability of another rate hike in September, trades remained skeptical, sending the U.S. currency weaker.
The dollar index was recently 0.04% lower, down from a two-week high earlier in the week, though losses were limited since money markets had already factored in Wednesday’s 25 basis point increase. Sterling held steady at $1.2935, having gained somewhat versus the dollar the previous session.
A senior economist at Insight Investment mentioned that another hike is possible in coming months, but the recent meeting might also mark the end of the hiking cycle. The U.S. is nearing the conclusion of hiking cycle faster than its peers. A dovish Fed tilt will almost certainly put downward pressure on the U.S. currency in the medium term.
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