Fed Signals Hawkish Stance
The surprisingly hawkish note struck this week by the Federal Reserve’s new Chairman Kevin Warsh has prompted a step-change in sentiment toward the dollar DXY . Interest rate differentials are the chief determinant of currency trends and with expectations for U.S. interest rates now markedly higher, the dollar looks as though it is breaking out of its trading range — and the direction is bullish. On Thursday, the dollar index DXY traded at a one-year high.
The surprisingly hawkish note struck this week by the Federal Reserve’s new Chairman Kevin Warsh has prompted a step-change in sentiment toward the dollar DXY .
Interest rate differentials are the chief determinant of currency trends and with expectations for U.S. interest rates now markedly higher, the dollar looks as though it is breaking out of its trading range — and the direction is bullish.
On Thursday, the dollar index DXY traded at a one-year high.