US Dollar Hits One-Year High
The US dollar index rose to a one-year high on Thursday (June 17) after hawkish signals from the Federal Reserve prompted market expectations for an interest rate hike this year. The Fed kept interest rates in the 3.50% to 3.75% range, but the latest projections show nearly half of policymakers now expect a rate hike.
These expectations have been reinforced by solid US economic data. The last three payroll reports showed significantly higher-than-expected monthly employment growth, while the latest data showed jobless claims fell last week as layoffs remained low. The Fed funds futures market now rates a 69% chance of a September rate hike.
The dollar index rose 0.24% to 100.59 and briefly touched 100.8, its highest level since May 2025. The euro fell 0.17% to $1.1479, while the pound weakened 0.35% to $1.3245. Both touched their lowest levels in more than two months.
The Japanese yen weakened to 160.94 per dollar, its lowest level since July 2024. This weakening erased gains following Tokyo's intervention on April 30 and re-emerged warnings from Japanese officials that they were prepared to take steps to support the currency.
The decline in oil prices after the US and Iran signed an interim deal temporarily reduced some of the dollar's appeal as a safe-haven asset. However, the impact was limited as markets focused more on the prospect of higher US interest rates. Meanwhile, the risk-sensitive Australian dollar rose 0.2% to $0.7028, while the Bank of England kept interest rates unchanged at 3.75%. (arl)
Source: Newsmaker.id
