Dollar rallies after FOMC favorable decision for third rate hike projection
After cooling down the heat with North Korea at the moment, US dollar continues to surge against the euro, yen and the British pound after the Fed announces the favorable decision for third rate hike projection. The post-fed announcement, all major currencies like euro, yen, Australian dollar loses it’s strength & started declining against the dollar as investors have rekindled their faith in the US dollar. Currently, the US economy has been affected on various fronts like heated arguments with North Korea, a powerful hurricane hit the economy badly but despite all the challenges Fed policymakers have a firm belief that these storms will affect the country’s economic performance only in the short run.
In the recent market move, Yen has a double blow from rising U.S. Treasury yields & the bank of Japan keeps the 10-year benchmark yield around zero percent. Due to a push down in the Japan interest rates as the rest of the world is moving another way around not giving the good signals for the foreign institutional investors.
Due to continuous tumbling of the bank stocks, it is becoming difficult for the companies to plan their fiscal year ahead.
Similarly, there is a drop in prices of the Australian dollar in the wake of the Fed decision as well as the comments made by the RBA governor Philip Lowe.
In a short run, it seems that the US dollar pairs are going to be much more volatile & continue to be affected by the market news & shift in market sentiments. However, with the Fed policymakers decision & looking at the US market growth prospects, it is expected that the US dollar will continue to take a stronghold in the market in a long run.