Federal Reserve cues for 2025 could extend the currency’s cycle of strength.
He dollar advanced against its peers this Wednesday and hit its highest level in two years, after the Federal Reserve (Fed) announced a widely expected interest rate cut, while indicating that it would slow the pace of its monetary policy easing cycle.
He dollar indexwhich measures the rate of the greenback against six rival currencies, rose to 108.260, reaching its highest level since November 2022. Finally, it rose 1.08% to 108.08.
The Fed cut its benchmark policy rate by 25 basis points, to the range of 4.25% to 4.50%, and officials signaled they will likely pause further rate cuts next year given a stable labor market and inflation. . The performance of the US bonds The 10-year benchmark rose 6.1 basis points to 4.446%, hitting a four-week high, Reuters reported.
“The Fed raised its core inflation forecast and adjusted the dot plot; so the rate cuts are already being discounted and I think we have a more discounted rate cut for next year and that’s less than it was before.” “said Axel Merk, president and chief investment officer of Merk Hard Currency Fund in Palo Alto, Californiaand added: “Therefore, the initial market perception is that it is aggressive and positive for the dollar”
The dollar strengthened by 0.89% to 0.90020 against the swiss francafter reaching a high of 0.90150, its highest level since July, while the euro fell 1.17% to $1.03695, falling to a three-week low.
In turn, it rose to reach a maximum of 15 and a half years against the south korean wonreaching 1,454.41, the highest level since March 2009. Finally, it rose 1.03% to 1,452.19 per dollar.
Source: Ambito
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