Dollar hits 19-month high on hawkish Fed comments
The US dollar rose to a near 19-month high against major currencies, buoyed by hawkish remarks from Federal Reserve officials. The dollar index reached 103.24, with Fed presidents advocating further rate hikes to combat persistent inflation.
The US dollar rose against major currencies on Friday, briefly touching a near 19-month high, supported by hawkish comments from Federal Reserve officials and the US 10-year Treasury yield remaining above 5 per cent.
The dollar index climbed to 103.24 during the session, before settling at 103.18 in New York late trade, a gain of 0.3 per cent. The euro fell 0.3 per cent against the dollar, trading at US$1.1054, while sterling also dropped 0.3 per cent to US$1.3236. The dollar was little changed against the yen, at 159.85 yen.
Cleveland Fed President Loretta Mester said she still believes short-term interest rates need to be raised to lower inflation, but added that the pace of increases could be gradual. Chicago Fed President Austan Goolsbee expressed concern over persistently high inflation, while San Francisco Fed President Mary Daly said she sees a need for further rate hikes to address high inflation, though no rushed decision is required.
The remarks from three regional Fed presidents underscored a hawkish tilt within the central bank, reinforcing expectations of additional monetary tightening in the coming months.