The dollar rose against the euro and the yen on Friday (March 18) after the Federal Reserve raised interest rates for the first time on Wednesday (March 16) and plans more rate hikes this year to curb inflation.
- The dollar index against the six major currencies in a basket of currencies rose 0.27% to 98.2360.
- The euro was lower to $1.1056 from $1.1105.
- The pound strengthened against the US dollar at $1.3184 from $1.3156.
- The Australian dollar rose to $0.749 from $0.7377.
- The dollar strengthened against the yen at 119.12 yen from 118.59.
- The yen weakened against the Swiss franc to 0.9320 francs from 0.9366 francs.
- The US dollar was also lower against the Canadian dollar at 1.2600 Canadian dollars from 1.2644 Canadian dollars.
The dollar rose after St. Louis Fed President James Bullard said the Fed should raise interest rates 12 times this year to show it is serious about fighting inflation. Inflation, which is at its highest level in 40 years, is getting to people.
Bullard said he wants the Fed to raise interest rates to above 3% from the current level of near 0%.
In addition, some Fed officials speculated that the Fed will raise interest rates six more times by 0.25% each for the rest of the year. This would put the short-term interest rate at 1.75-2.00% this year.
Meanwhile, another Fed official predicted that there will be three rate hikes in 2023, but none in 2024.