The dollar price was reportedly strengthened in the Wednesday trading session and it was due to the input from the US Feds.
The trading value of the dollar did not lose to the major currencies on a particular day and it kept on gaining strong momentum.
It happened as the US Feds finally released the minutes of their meeting, discussing the fate of the interest rates in near future.
Minutes Show US Feds are Hawkish
The meeting minutes shared by the Feds were what the traders wanted to see before making their next move with the USD.
Most of the traders were hoping to see a strong stance by the Feds against the rising inflation rates. This meant that the Feds would continue with the interest rate hikes to bring the inflation rates under control.
The Feds have decided that they will indeed increase the interest rates but they will not be hiked as aggressively as they did in the past.
Instead, they will continue hiking the interest rates at a slow pace. The inflation rates have been moving higher and the best way to deal with the situation is to keep up with the monetary policy.
This is how they will be able to bring the inflation rates down and make things favorable for the economy to go.
So far, the decisions made by the Feds have worked out in favor of the traders. The dollar price has spiked as traders have continued increasing the interest rates and from the looks of it, the rise will continue.
Dollar Performance versus the Major Currencies
The value of the sterling has moved in the downward stream versus the trading price of the dollar. The forex market data has revealed that the value of sterling has recorded a 0.58% dip against the dollar.
After the dip, the trading price of the sterling moved down to $1.2036.
The euro has also declined in value versus the trading price of the greenback. According to the data, the value of the euro has moved down by 0.44% against the dollar.
Following the decline, the euro now trades at a low of $1.0600 versus the dollar.
The dollar index has witnessed a significant push versus the major currencies. It has reportedly moved up by 0.40% versus the major currencies. It now trades at a high of 104.57 against the six major currencies.
This is not the highest level the dollar price reached in today’s session. It had reportedly surged to a high of 104.59 versus the major currencies.
Feds Support 50 bps Hikes
The minutes shared by the US Feds reveal that they are not willing to tone down their monetary policy. They will continue hiking the interest rates and the next hike might be 50 bps.
The final decision about the interest rate hikes is yet to be made by the Feds but there are strong speculations that the Feds may go with a 25 bps hike.
If the interest rates keep on increasing, the trading price of the dollar will continue gaining more momentum and strength.
This would eventually lower the trading prices of most of the currencies against the dollar. Most importantly, the dollar will be able to gain strong momentum against the Japanese yen and the Chinese yuan.
The Feds meeting had reportedly been held between January 31 and February 1. In the meeting, most of the Feds seem to have supported the interest rate hikes by a quarter.
Whereas, the traders are hoping that the Feds may push the interest rates by 50 bps. Given the recent hikes, the interest rate increment target range stands between 4.5% and 4.75%.
The expectations are that the Feds may push the interest rates over the 5.00% target. The predictions are that by July 2023, the interest rates may surge to a high of 5.38%.