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Dollar Extends Gains Against Rivals

Dollar Extends Gains Against Rivals

The U.S. dollar turned in another fine performance, gaining significant ground against its major rivals on Friday, as it continued to benefit from a hawkish policy outlook from the Federal Reserve.

While announcing its monetary policy on Wednesday, the Fed signaled that it would raise interest rates by 2023, and also likely taper its bond-buying plan sometime sooner than expected.

Fed Chairman Jerome Powell indicated during his post meeting press conference on Wednesday that the members have started discussions about scaling back the bond purchase program given higher inflation and faster economic growth.

The dollar index rose to 92.41, its highest level since mid-April. Despite paring some gains subsequently, the index remains quite high up at 92.28, more than 0.4% up from the previous close.

Against the Euro, the dollar firmed to $1.1867, gaining about 0.35%. The euro area current account surplus totaled EUR 23 billion in April versus EUR 18 billion surplus in the previous month, the European Central Bank reported.

The Pound Sterling was down too, fetching $1.3808 a unit, compared to $1.3926 on Thursday. Data from the Office for National Statistics showed that retail sales in the UK dropped 1.4% month-on-month in May, reversing a 9.2% rise in April and confounding expectations for an increase of 1.6%.

On a yearly basis, the retail sales volume growth moderated to 24.6% in May from 42.4% a month ago. This was also slower than the expected expansion of 29%.

Against the Yen, the dollar was slightly weak at 110.19.

The dollar strengthened to 0.7490 against the Aussie, gaining from 0.7552 a unit.

Against Swiss franc the dollar gained, fetching CHF 0.9224 a unit, as against CHF 0.9175 Thursday evening.

The Loonie weakened to 1.2440 a dollar, declining from 1.2358.

The material has been provided by InstaForex Company – www.instaforex.com