US Dollar Trades on Mixed Signal as Market Reels from Fed Rate Hike Announcement

Azeez Mustapha

Updated:

Unlock Daily Forex Signals

Select a Plan

£39

1 - month
Subscription

Select

£89

3 - month
Subscription

Select

£129

6 - month
Subscription

Select

£399

Lifetime
Subscription

Select

£50

Separate Swing Trading Group

Select

Or

Get VIP forex signals, VIP crypto signals, swing signals, and forex course free for lifetime.

Just open an account with one our affiliate broker and make a minimum deposit: 250 USD.

Email [email protected] with a screenshot of funds on account to get access!

Sponsored by

Sponsored Sponsored
Checkmark

Service for copy trading. Our Algo automatically opens and closes trades.

Checkmark

The L2T Algo provides highly profitable signals with minimal risk.

Checkmark

24/7 cryptocurrency trading. While you sleep, we trade.

Checkmark

10 minute setup with substantial advantages. The manual is provided with the purchase.

Checkmark

79% Success rate. Our outcomes will excite you.

Checkmark

Up to 70 trades per month. There are more than 5 pairs available.

Checkmark

Monthly subscriptions begin at £58.


The US dollar halted its descent in the Asian session on Thursday as the recently announced Federal Reserve interest rate hike rocked the financial markets.

Money markets anticipated the 75 basis points (bps) increase announced yesterday and had already priced in this possibility and several other rate hikes as inflation continues to swell. The greenback took an immediate downturn after Fed Chair Jerome Powell’s speech yesterday before finding a footing in the early Asian session.

The bearish reversal recorded today helped the single currency extend its gains against the euro as the EUR/USD pair etched closer to last month’s low at 1.0348. The dollar also received some support from US Treasury yields, which plummeted on Wednesday but regained an upward momentum today.

However, the dollar continued on its two-day slide against the Japanese yen as the policy differences between the US Fed and the Bank of Japan widened. Unlike the Federal Reserve, the BoJ remains resolute on maintaining an ultra-lose policy, pinning internet rates near zero. At press time, the USD/JPY trades at 132.80.

Against the Aussie, the greenback lost dominance after the AUD/USD fell to the 0.6850 low. However, the Australian dollar could not facilitate a bullish push above the 0.7025 mark, triggering a pullback in the early Asian session today.

US Dollar Index (DXY) Taps Twenty-Year High Near 106

Interestingly, the US dollar index (DXY) tapped a fresh multi-decade high yesterday at 105.79 but has dropped below the 104.60 level, at press time, following the ease off in the Asian session.

Analysts at Westpac explained: “The dollar index’s reversal along with rates after the Fed lifted rates 75 bp speaks to elevated short-term expectations more than anything else.” They added:

“It could ease back to the low-104s near term before the uptrend resumes. Chair Powell outlined a resolute path for taking Fed Funds to just shy of 4% by 2023, surely keeping risky assets unsettled for an extended period…the index can make a run at 107 in Q3.”

 

You can purchase Lucky Block here. Buy LBlock

  • Broker
  • Benefits
  • Min Deposit
  • Score
  • Visit Broker
  • Award-winning Cryptocurrency trading platform
  • $100 minimum deposit,
  • FCA & Cysec regulated
$100 Min Deposit
9.8
  • 20% welcome bonus of upto $10,000
  • Minimum deposit $100
  • Verify your account before the bonus is credited
$100 Min Deposit
9
  • Over 100 different financial products
  • Invest from as little as $10
  • Same-day withdrawal is possible
$250 Min Deposit
9.8
  • The Lowest Trading Costs
  • 50% Welcome Bonus
  • Award-winning 24 Hour Support
$50 Min Deposit
9
  • Fund Moneta Markets account with a minimum of $250
  • Opt in using the form to claim your 50% deposit bonus
$250 Min Deposit
9

Share with other traders!

Azeez Mustapha

Azeez Mustapha is a trading professional, currency analyst, signals strategist, and funds manager with over ten years of experience within the financial field. As a blogger and finance author, he helps investors understand complex financial concepts, improve their investing skills, and learn how to manage their money.

Leave a Reply

Your email address will not be published. Required fields are marked *