Monday , June 21 2021

The dollar rose to a 16-month high



The dollar rose to a 16-month high on Friday after the Federal Reserve kept interest rates unchanged and reaffirmed its attitude towards tightening monetary policy, hinting to investors that interest rates will rise in December.

The US currency fell sharply after Tuesday's US midterm election results, on expectations that election results made further fiscal stimulus measures impossible.

But the dollar rose again and outperformed most of the major currencies now, supported by the strength of the US economy and rising interest rates.

It is widely expected that the Fed will raise interest rates in December, the fourth increase this year.

A rebound in the dollar, which has been supported by trade tensions as a safe-haven currency, has pushed the yuan to seven yuan against the dollar and moved the euro towards $ 1.13.

In Japan, where interest rates are expected to remain at very low levels, the yen is approaching a five-week low against the dollar and down 2.2% over the past 10 sessions.

But the Japanese currency reversed course today, rising 0.2% to 111.86 yen against the dollar.

The dollar index, which tracks the performance of the greenback against a basket of six major currencies, rose to a one-week high of 96.89, approaching a 16-month high of 97.2 on Oct. 31.

The euro traded at $ 1.1343, down 0.2% after falling sharply on Thursday.

Sterling reached 1.3015 dollars in trading, down 0.4%.

The Australian dollar fell 0.2% at $ 0.7241. The Australian dollar usually falters as sentiment weakens against China, Australia's biggest trading partner.


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