The dollar fell on Thursday after the Federal Reserve delivered what some expected to be its last rate hike, while market focus shifted across the Atlantic to the European Central Bank’s (ECB) rate decision later in the day.
The dollar fell 0.3% to 100.81, while sterling touched a one-week high of $1.29735 earlier in the session.The dollar fell 0.3% to 100.81, while sterling touched a one-week high of $1.29735 earlier in the session.
The Fed on Wednesday raised interest rates by a quarter of a percentage point, as expected, marking the central bank’s 11th rate increase in its last 12 meetings. The New Zealand dollar was last 0.8% higher at $0.6259, having earlier surged more than 1% to a one-week high of $0.6274.“Of course, the Fed did not close the door to further rate hikes, but it seems like in the Asian session, people took a firm conviction that this could be the last hike for the Fed,” said Bank of Singapore currency strategist Moh Siong Sim.
The ECB comes under the spotlight next, with investors expecting the central bank to similarly raise rates by 25 bps at the conclusion of its monetary policy meeting later on Thursday, with focus on its forward guidance.“The ECB looks all but certain to hike the deposit rate by 25 bps… This should not surprise market as it has been largely telegraphed,” said Nadia Gharbi, senior economist at Pictet Wealth Management.Elsewhere, the Japanese yen remained under pressure, though was last roughly 0.
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