U.S. Dollar Rises On Hawkish FOMC Rate Outlook
08 January 2025 - 5:03PM
RTTF2
The U.S. dollar strengthened against other major currencies in
the European session on Wednesday, as traders await the minutes of
the Federal Open Market Committee (FOMC) meeting, scheduled for
release later in the day.
At the conclusion of the policy meeting in December, the Fed
took a more hawkish position and indicated that it would slow the
pace of rate cuts in 2025. Fed Bank of Atlanta President Raphael
Bostic said on Tuesday that officials should be cautious with
policy decisions, given uneven progress on lowering inflation.
Bostic underlined the necessity of leaning toward maintaining
high interest rates in order to guarantee the accomplishment of
price stability objectives.
A softer risk tone, U.S-China trade war concerns, geopolitical
tensions, and the uncertainty surrounding U.S. President-elect
Donald Trump's tariff proposals, also led to the upturn of
safe-haven USD.
Traders also await the U.S. labor market reports - the ADP
report on private-sector employment and Weekly Initial Jobless
Claims due later today.
In the European trading today, the U.S. dollar rose to a 5-day
high of 0.9121 against the Swiss franc, from an early low of
0.9087. The greenback may test resistance near the 0.92 region.
Against the euro and the pound, the greenback advanced to 2-day
highs of 1.0316 and 1.2441 from early lows of 1.0358 and 1.2494,
respectively. If the greenback extends its uptrend, it is likely to
find resistance around 1.01 against the euro and 1.22 against the
pound.
The greenback edged up to 158.29 against the yen and 1.4369
against the Canadian dollar, from early lows of 157.91 and 1.4339,
respectively. On the upside, 163.00 against the yen and 1.45
against the loonie are seen as the next resistance level for the
greenback.
Looking ahead, U.S. mortgage approvals data, U.S. weekly jobless
claims data, U.S. EIA crude oil data and U.S. consumer credit
change for November are slated for release in the New York
session.
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