{"id":129487,"date":"2021-06-21T01:17:13","date_gmt":"2021-06-21T01:17:13","guid":{"rendered":"https:\/\/precoinnews.com\/?p=129487"},"modified":"2021-06-21T01:17:13","modified_gmt":"2021-06-21T01:17:13","slug":"dollar-holds-near-multi-month-high-after-feds-hawkish-tilt","status":"publish","type":"post","link":"https:\/\/precoinnews.com\/business\/dollar-holds-near-multi-month-high-after-feds-hawkish-tilt\/","title":{"rendered":"Dollar holds near multi-month high after Fed's hawkish tilt"},"content":{"rendered":"
TOKYO (Reuters) – The dollar held near multi-month peaks against other major currencies on Monday, after the U.S. Federal Reserve surprised markets last week by signalling it would raise interest rates and end emergency bond-buying sooner than expected.<\/p> The dollar index, which tracks the greenback against six major currencies, stood at 92.232 after gaining 1.9% last week, its biggest rise since March 2020.<\/p>\n On Friday, it jumped above key resistance around 91.95, marking a 61.8% retracement from its decline to 89.53 earlier this month from an April peak of 93.439.<\/p>\n \u201cLike many, I had expected the 61.8 Fibonacci retracement in the dollar index to hold for a bit … and at least see some consolidation,\u201d said Chris Weston, the head of research at Pepperstone Markets Ltd, a foreign exchange broker based in Melbourne.<\/p>\n \u201cThat wasn\u2019t to be, and it seems technical resistance means very little when this type of re-positioning event plays out.\u201d<\/p>\n The euro traded at $1.1872, having hit a 2 1\/2-month low of $1.1847 on Friday.<\/p>\n The British pound fetched $1.3809, standing near Friday\u2019s two-month low of $1.3791.<\/p>\n The Australian dollar wobbled at $0.7503, having dropped to as low as $0.7478, a low last seen in December.<\/p>\n The safe-haven yen held firmer as the Fed\u2019s tilt hit risk asset prices. It ticked up to 110.185 yen to the dollar, pulling away from Thursday\u2019s 2 1\/2-month low of 110.825<\/p>\n The jolt to foreign exchanges was triggered on Wednesday by Fed forecasts showing 13 of the 18-person policy board saw rates rising in 2023, versus only six previously, with the median board member tipping two hikes in 2023.<\/p>\n Investors\u2019 risk appetite took another hit after St. Louis Federal Reserve President James Bullard said on Friday that the U.S. central bank\u2019s shift toward a faster tightening of monetary policy was a \u201cnatural\u201d response to economic growth and particularly inflation moving quicker than expected as the country reopens from the coronavirus pandemic.<\/p>\n \u201cThe Fed\u2019s latest dot plot was a meaningful surprise. In a scenario where markets continue to move Fed pricing in a hawkish direction, we could envision the euro\/dollar falling an additional 2%, if European rates remain about unchanged,\u201d wrote analysts at Goldman Sachs.<\/p>\n But they also noted they do not expect a sustained dollar either, noting that other central banks will need to consider policy normalisation as their economies recover from depressed levels.<\/p>\n In cryptocurrencies, bitcoin stood at $35,689, while ether changed hands at $2,241, both paring losses made during the weekend to stand little changed from Friday\u2019s closing levels.<\/p>\n