The dollar index gained against a basket of major currencies on Thursday (April 7) following expectations that the U.S. Federal Reserve (Fed) will accelerate rate hikes to curb inflation.
- The dollar index against the six major currencies in a basket of currencies rose 0.15% to 99.7510.
- The dollar strengthened against the yen at 123.96 yen from 123.81 yen.
- The dollar strengthened against the Swiss franc at 0.9338 francs from 0.9328 francs.
- The US dollar also strengthened against the Canadian dollar at 1.2580 Canadian dollars from 1.2519 Canadian dollars.
- The euro was lower against the dollar at $1.0881 from $1.0905.
- The pound rose to $1.3073 from $1.3066.
- The Australian dollar fell to $0.7485 from $0.7511.
The dollar continued to rise and the dollar index reached a two-year high last night. This came after the minutes of the Fed’s March meeting noted that the Fed committee favored balance sheet cuts and accelerated rate hikes to curb inflation.
The Federal Reserve has agreed to cut the balance sheet by $95 billion per month as early as May and to support a 0.50% rate hike in 1-2 meetings if inflationary pressures persist.
If the Fed raises interest rates in line with market expectations at its May meeting, this would be the first 0.50% rate hike since 2000.
Regarding economic data released last night. Initial jobless claims fell 5,000 last week to 166,000, according to the Labor Department. That’s the lowest level since November 1968
The number of Americans continuing to file for unemployment benefits rose to 1.52 million.