Dollar rises on Fed’s hawkish sentiments
The dollar nudged higher on Thursday in early European trade. This came after the Federal Reserve’s hawkish pronouncements that pushed traders to price in an early tightening of monetary policy.
The Dollar Index that measures the greenback against other major currencies climbed 0.1% at 92.302, retreating from last week’s one-month low of 91.775.
The USD/JPY pair gained 0.2% to 109.66, while the EUR/USD pair jumped 0.1% at 1.1839
The risk-sensitive AUD/USD pair tallied a 0.2% increase to 0.7397, and the GBP/USD pair rose 0.1% to 1.3893.
Fed Vice Chair Richard Clarida said on Wednesday that interest rate hike conditions might be met as early as late 2022, paving the way for a move in early 2023. The central bank also hinted on the possible start of asset tapering later in 2021 or early 2022.
Fed members maintained that progress in the labor market is needed before any moves.