Dollar Index Holds Above 106, Harker Says It Will Take Some Time For Full Impact Of Higher Rates To Be Fully Absorbed

Published on Oct 17, 2023 12:20

The US dollar index is holding on above 106 mark as markets are closely watching the developments on the interest rates front. The dollar index had spiked on Friday to hit a one week high of 106.57 but has been tentative thereafter as participants assessed the near term monetary policy dynamics and the escalating global geopolitical scenario added another dimension to the price action in greenback. Meanwhile, Philadelphia Federal Reserve President Patrick Harker noted in a speech yesterday that one of the pillars of the Federal Reserve`s dual mandate is price stability - getting inflation back to that 2 percent annual target. He opined that disinflation is under way, labor markets are coming into better balance, and economic activity continues to be resilient. The workings of the economy cannot be rushed, and it will take some time for the full impact of the higher rates to be fully absorbed. Against this backdrop, he believes the prudent position to be in is one in which the policy rate can remain steady and a resolute, but patient, stance of monetary policy will allow us to achieve the soft landing.