Market Analysis

The Fed announced its decision to hike interest rates by 75 basis points

FOREX

The US dollar is on the front foot during early Thursday trading, climbing more than one percent during the last 24 hours. It’s the day after the Fed announced its decision to hike interest rates by 75 basis points, taking the fund rate to the highest level since 2007. This was a much-expected move and therefore not the reason for the greenback’s strengthening. The real support for the dollar was delivered by Jerome Powell. The Chairman of the Federal Reserve was more hawkish than expected during the press conference, acknowledging that inflation remains a big concern and therefore rates will have to rise more than previously expected. Those who expected the Fed to pivot any time soon would have been disappointed by Powell’s message. On the other hand, dollar bulls will be celebrating the prospect of further monetary tightening as it generates strong tailwinds for the greenback, creating scope for more gains in the foreseeable future.

Ricardo Evangelista – Senior Analyst, ActivTrades                       

 

Source: ActivTrader

 

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