The dollar index fell to 101.03 units, the lowest level since April 22. The euro hit 1.10020, its highest level since April 4. Data showed that inflation in the bloc slowed for the third consecutive month in January.
Sterling rose 0.6% to $1.23910, and the greenback fell against its Japanese peer at 128.55 yen, down from January 20.
What the Fed’s message means for the dollar index
Adam Button of ForexLive in Toronto said that “If the Fed is tough, the dollar will go up, but the market doesn’t seem to be afraid.” Traders believe that the US central bank is nearing the end of its hardening cycle .
The increase in interest rates by 25 basis points (bp) is the smallest increase since March 2022and currently places them in a range between 4.5% and 4.75%.
If the Fed continued with its aggressive policy of raising rateswas going to occur an impact on the real economy and also an aversion to risk that would have a direct impact on stock market indices, especially in sectors linked to consumption and technology.
against hand, the dollar index was going to have a tendency to soar as hard currencies are considered a place of refuge in times of financial crises.
Source: Ambito
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