On Thursday, the US Dollar Index (DXY) opens up the session slightly lower a day after snowballing as much as 1.03 per cent, as traders seem to be rebalancing their position following a day of upscaled volatility. As of early-morning US trading hour, US Dollar Index was last trading 0.4 per cent lower to 111.65, while Yen clawed back sharply, gaining 1.85 per cent, as Japan decided to intervene into the FX market for the first time since 1998.
Euro opens 0.2 per cent higher, while Aussies, Kiwis and Canadian Dollar are found to be treading water. On Wednesday, amid a large-scale rate-hike from the US Fed that had sent shockwaves across the global equity market, the US Dollar Index (DXY) measured against a basket of six major currencies took a giant leapfrog of as much as 1.03 per cent.
On top of that, latest high-tide in US Dollar Index came forth as the US Fed had hiked its benchmark borrowing cost by 75 bps (basis percentage point) between a range of 3.00 per cent to 3.25 per cent, while painting a bleaker future landscape for the US economy, the US Fed had projected that US unemployment rate could hit as high as 4.4 per cent by early-2023 and the US economy would only witness a growth of 0.2 per cent this year, eventually bolstering a safe-haven bid for the US Dollar.
Besides, speaking in a press briefing shortly after the US Fed’s rate-hike announcement, Fed Chair Powell said that the US Housing Market is heading towards a correction territory, while US labour market would continue to witness a weakness, repercussion of which has sent a raft of emerging market and major currencies to their multi-year lows.
Dollar gains as Fed paints a bleaker economic picture
Citing statistics, in the day’s FX market wind-down, the US Dollar Index (DXY) measured against a basket of six major currencies on an average soared as much as 1.03 per cent to 111.01, while the bloc’s single currency euro shared among 19 member states tumbled 1.26 per cent to $0.9844 after hitting an intra-session low of $0.9812 earlier in the day.
Apart from that, Japanese Yen, which has lost its safe-haven allure, lost 0.19 per cent against its American peer to 144.01 yen per Dollar, while safe-haven Swiss Franc shrugged off 0.30 per cent to $0.9668. Risk-sensitive Australian Dollar dwindled 0.90 per cent to $0.6628 against its American peer, while commodity-linked Canadian Dollar dipped 0.75 per cent to $1.3464.
Besides, British Pound pummelled as much as 0.93 per cent to $1.1272 against the greenback, however, Russian Rouble showed resilience as the rouble closed out the session 0.5 per cent higher at 61.10 rouble per Dollar.
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