Dollar jumps to 2018 high after Fed members strike hawkish tone

The dollar rebounded Monday, charging higher after two Federal Reserve members hinted that at least three interest-rate hikes are on the table in 2018.

What are currencies doing?

The ICE U.S. Dollar Index DXY, -0.50% climbed 0.4% to 92.344, trading around its highest level since Dec. 29. The broader WSJ Dollar Index BUXX, -0.36% gained 0.3% to 85.90 on Monday.

The euro EURUSD, +0.7562% fell to $1.966 late Monday from $1.2032 late Friday in New York. The shared currency stayed lower after data from Eurostat showed retail sales for the region rose 1.5% in November, meeting forecasts.

The dollar was little changed against the yen USDJPY, -0.11% however, buying ¥113.08 late Monday, compared with ¥113.05 on Friday.

Among emerging-market currencies, the South African rand USDZAR, +0.1509% lost ground against the dollar, which bought 12.3847 rand, up from 12.3086 late Friday. The move is not significant considering the rand appreciated nearly 14% over the last six weeks of 2017.

What’s driving the market?

Federal Reserve Bank of Cleveland President Loretta Mester in a Reuters interview on Friday said the strong U.S. economy and low unemployment level make the case for four rate hikes in 2018.

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