U.S. Dollar Holds Gains

The dollar held gains against most major peers from yesterday before the Federal Reserve concludes a two-day meeting after data yesterday enhanced prospects policy makers will raise rates sooner than investors expect.

The Bloomberg Dollar Spot Index closed at the highest level in a week yesterday after a measure of U.S. inflation accelerated faster than forecast. The yen was near a one-week low after a report showed Japan’s exports fell for the first time in 15 months. New Zealand’s dollar pared declines after Auckland-based Fonterra Cooperative Group Ltd., the world’s largest dairy exporter, said whole milk powder prices rose for the first time in nine auctions.

“The stronger than expected consumer price data dragged U.S. yields and dollar higher,” Estuko Yamashita, chief economist at Sumitomo Mitsui Banking Corp. in New York. “There’s a risk that the market may overreact should there be hawkish undertones from the Fed’s economic forecast and statement with the backdrop that inflation is picking up somewhat.”

Bloomberg

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.