U.S. Dollar Strengthens On Fed Rate Hike Prospectus
22 February 2018 - 2:32PM
RTTF2
The U.S. dollar advanced against its major counterparts in
pre-European deals on Thursday, on hopes for higher interest rates
after the minutes from the Federal Reserve's January meeting showed
the central bank plans to raise interest rates three times in
2018.
According to the Fed minutes, policymakers expressed rising
confidence on inflation while agreeing that the strengthening in
the near-term economic outlook increased the likelihood that a
gradual upward trajectory of the federal funds rate would be
appropriate.
The minutes showed that the Fed still plans to raise interest
rates three times in 2018, with the first of these modest rate
hikes coming in March.
The Fed officials "anticipated that the rate of economic growth
in 2018 would exceed their estimates of its sustainable longer-run
pace and that labor market conditions would strengthen
further."
The strengthening "increased the likelihood that a gradual
upward trajectory of the federal funds rate would be appropriate,"
pointing toward "further gradual increases."
The greenback strengthened to 1.2260 against the euro, its
strongest since February 12. If the greenback extends rise, 1.20 is
seen as its next resistance level.
The greenback firmed to near a 2-week high of 0.9409 against the
Swiss franc, compared to 0.9389 hit late New York Wednesday. The
greenback is seen finding resistance around the 0.96 area.
The greenback that finished Wednesday's trading at 1.3917
against the pound spiked up to an 8-day high of 1.3870. On the
upside, 1.36 is likely seen as the next resistance for the
greenback.
The greenback strengthened to an 8-day high of 0.7307 against
the kiwi and held steady thereafter. The pair closed Wednesday's
trading at 0.7318.
The greenback bounced off to 1.2702 against the loonie, from a
low of 1.2689 hit at 1:15 am ET. This may be compared to a 2-month
peak of 1.2706 set in the early Asian session. Next key resistance
for the greenback is likely seen around the 1.29 level.
The greenback rose back to 0.7797 against the aussie, heading to
pierce an 8-day high of 0.7791 seen at 8:15 pm ET. The greenback is
poised to challenge resistance around the 0.75 mark.
The greenback recaptured some of its lost ground against the yen
with the pair trading at 107.45. This may be compared to a 2-day
low of 107.16 hit at 8:35 pm ET. Further uptrend for the greenback
is likely to see it finding resistance around the 109.00 level.
Looking ahead, German Ifo business sentiment index for February
and U.K. preliminary GDP data for fourth quarter are due in the
European session.
At 7:30 am ET, the European Central Bank publishes account of
January 24-25 policy meeting.
In the New York session, U.S. weekly jobless claims for the week
ended February 17 and leading indicators for January, along with
Canada retail sales for December are due.
At 10:00 am ET, New York Fed President William Dudley speaks
about the economic situation in Puerto Rico and the United States
Virgin Islands, following Hurricanes Irma and Maria, at a press
briefing hosted by the Federal Reserve Bank of New York.
Atlanta Fed President Raphael Bostic will speak at the Banking
Outlook Conference hosted by the Federal Reserve Bank of Atlanta at
12:10 pm ET.
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