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US Dollar Strengthens Against Major Currencies Backed by Fed Announcement

Ulysses S. Grant on US 50-dollar billThursday’s trading session has seen the dollar gaining ground over other major currencies such as the Sterling Pound, the Japanese Yen and the Canadian Dollar. The dollar has gained significant ground based on the interest rates hike announced by the Fed on Wednesday.

The policy statement released by the Federal Open Market Committe indicated that the committe had increased interest rates by 25 basis point, which was largely expected and had been priced into the market by investors. The benchmark lending rate will now range between 0.50 percent and 0.75 percent.

The Fed also hinted at three interest rate hikes in 2017 as opposed to the two hikes that had been announced during the FOMC’s September meeting.

The rally by the US Dollar was also boosted by positive economic data relesed today where the National Association of Home Builders reported that its housing market index had rised to 70 from the 63 reported in November. The index was much higher than the predicted figure of 64.

The USD/JPY currency pair traded at a ten-month high of 118.65 although it retreated after a while then continued its upward trend. The USD/CAD also tested new highs as it traded at 1.3397, an increase of about 300 points from its 1-month low of 1.3080. The GBP/USD also tested new lows of 1.2380 on the backdrop of fears about a hard brexit and the rally by the US Dollar.

© SimonMugo for Forex News, 2016. | Permalink | No comment | Add to
Post tags: Federal Open Market Committee, GBP/USD, housing market index, National Association of Home Builders, United States, USD/CAD, USD/JPY

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US Dollar Strengthens Against Major Currencies Backed by Fed Announcement


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