Dollar Gains More than 1% on the Week
The dollar index rose to 100.4 on Friday, its highest level in one-and-a-half months, continuing to benefit from the latest FOMC decision and a weaker yen. The Federal Reserve raised the target range for the federal funds rate by 25bps to 3.75%-4%, as expected. The Fed also signalled at least one more rate hike this year, while Chair Warsh reaffirmed the central bank’s commitment to taming inflation, helping to restore market confidence in its policy stance and credibility. On the other hand, the Bank of Japan raised borrowing costs by 25bps, as anticipated, but two policymakers voted against the hike, suggesting that the central bank may not proceed with further increases as quickly as initially expected, and sending the yen lower. The dollar is up nearly 1.3% on the week.
4 on Friday, its highest level in one-and-a-half months, continuing to benefit from the latest FOMC decision and a weaker yen. 75%-4%, as expected. The Fed also signalled at least one more rate hike this year, while Chair Warsh reaffirmed the central bank’s commitment to taming inflation, helping to restore market confidence in its policy stance and credibility. On the other hand, the Bank of Japan raised borrowing costs by 25bps, as anticipated, but two policymakers voted against the hike, suggesting that the central bank may not proceed with further increases as quickly as initially expected, and sending the yen lower.
3% on the week.