In Tuesday's trading, the dollar strengthened against other major currencies. This could indicate the first monthly increase since last September. Some views suggest that persistently high interest rates could be the cause. In addition, recession fears are also one of the factors that make investors nervous.
Dollar strengthens - Fed rates rise
Some recent upbeat data, such as the January jobs report, helped the dollar rise in February. This was due to expectations that the Federal Reserve would have to raise interest rates more and for longer than markets had previously anticipated to combat inflation.
 
U.S. interest rate futures had previously priced in the Federal Reserve’s target policy rate peaking at 5.4% in September. The Fed’s policy rate is currently in a target range of 4.50%-4.75%.
 
The dollar index, which measures the greenback against a basket of six major currencies, was up 0.22% at 104.88. It was up 2.7% on the month.
 
Data on Tuesday suggested that the Fed’s rate hikes were starting to have the desired effect in cooling the hot economy. However, the data also showed an unexpected decline in U.S. consumer confidence in February, falling to 102.9 from a reading of 106 in January. Economists polled by Reuters had forecast the index to read 108.5.
 
Earlier, the dollar on Tuesday hit a more than two-month high against the Japanese yen, rising to 136.93 yen. However, after the U.S. data, the dollar was last down 0.06% against the yen at 136.15.
 
Japan’s policy of keeping yields steady means the yen is sensitive to moves elsewhere. Incoming Bank of Japan (BOJ) Governor Kazuo Ueda said this week it was too early to comment on how the central bank might change policy.

also read : 

Dollar USD Rises Six Weeks On Rate Hike Expectations


Warning!

This analysis is based on fundamental and technical views from trusted sources, not advice or invitation. Always remember that this content is intended to enrich the reader's information. Always use independent research first regarding other forex information to be used as a reference in your trading.


Get the latest news and articles from GIC Indonesia, which you can check on Google News every day to find out the latest updates about the world of forex to crypto. Trading is also on GICTrade using an ECN account to enjoy trading with low spreads starting from zero!