Risk Appetite Of Investors Fades, US Dollar Gains Momentum Against Major Currencies

The US dollar started its Wednesday trading session on a bad note. Its price was seen as experiencing a downtrend against the trading price of the major currencies.

However, as the trading session continued progressing, more developments were witnessed with the trend.

Later, in the same trading session, the trading price of the dollar started to gain strong momentum against the major currencies.

The traders started to pour in more investments in favor of the dollar rather than other major currencies. This pushed the trading price of the dollar to higher levels.

In return, the trading price of the major currencies could be seen faltering against the dollar. After a long time, the dollar was witnessing a strong push while the rest of the currencies were left behind.

Investors are Losing Risk Appetite

The risk appetite of the investors had been around for a while. They were prone to taking risks with other currencies against the dollar.

This is what kept the dollar price from surging as many investors kept supporting other currencies against the greenback.

Finally, the situation seems to have changed and the traders are no longer ready to take the risks they were ready to take a few trading sessions back.

The announcement by the Feds

The reason why the investors lost their appetite was because of the announcement made by the Feds. They recently made it clear that they could see a surge in the inflation rates.

Therefore, it is necessary that the interest rates are hiked at an aggressive rate. This is exactly what the USD traders wanted to hear and they acted upon it.

They started to make huge investments in the dollar and its price started to advance. While other major currencies could see their values declining against the trading price of the dollar.

The Feds are serious to take the inflation rates down and they are not going to sit idle until they achieve their goal. This is the reason why the Feds want to do whatever is necessary to bring the situation under control.

This is the reason why the Feds have announced that they will continue increasing the interest rates to tackle the rising inflation rates.

Expectations from the Analysts

Right after the announcement, the trading price of the dollar could be seen surging to higher levels. However, it is not moving higher than the levels it had hit back in the month of October 2022.

It is still hovering lower than those levels, which suggests that it is not right to make speculations that the dollar price would keep on rising.

The traders still hope that the dollar price may continue surging and it may hit higher levels in the running year. However, the analysts are making different speculations from their end pertaining to the dollar price.

According to analysts, the dollar has already reached its peak price. The dollar may not be able to move to any higher levels in the upcoming days.

Therefore, the only option for the dollar is to move in the downward direction. The dollar may indeed experience a downtrend in the upcoming days and the investors may not be happy about it.

One factor that has analysts convinced of the potential downward decline of the dollar is the growing recession fears.

The Feds may be doing a good thing by increasing the interest rates in the upcoming months to tame inflation but they are ignoring a major threat that lies ahead.

Although they are fully aware of the impact of the recession, they are not ready to let the inflation rates get out of control.

This is going to be a huge problem for both sides and no one knows what is going to happen with the dollar in the upcoming days.

Recent Performance of the Dollar

For now, the value of the dollar is moving higher and the Australian dollar has dipped 0.7% against its might. The dollar has surged 0.8% against the Canadian dollar, while the New Zealand dollar has also slid against it.

The value of the dollar has surged 0.6% against the yen while t has surged 0.4% against the pound.