Dollar Index Adds Massive Strength On Hawkish Fed

Published on Sep 21, 2023 11:22

The dollar index is sitting high at a fresh six month peak on Thursday following the Federal FOMC decision to continue staying hawkish on interest rates. The Federal committee decided to maintain the target range for the federal funds rate at 5-1/4 to 5-1/2 percent but will continue to assess additional information and its implications for monetary policy. The Fed stated that it is strongly committed to returning inflation to its 2 percent objective and would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee`s goals. The dollar index surged to fresh six month peak at 105.29, up almost half a percent on the day. Benchmark US treasury yields spiked towards 4.4%, a fresh 16-month high after a hawkish Fed. Among the basket currencies, EURUSD that carries maximum weight in the dollar index plunged nearly half a percent at $1.0674. GBPUSD also let go crucial levels and approached a six month low. Currently, the pair is quoting at $1.2322.