FOREX-Dollar slips from 16-month highs as Fed hawkishness dominates
The dollar slipped on Thursday but was still close to its highest since July 2020 against the euro, having strengthened due to market expectations that the U.S. Federal Reserve will raise rates sooner than other major central banks.
Minutes from the Fed’s Nov. 2-3 meeting boosted the dollar on Wednesday as they indicated the Fed had become more concerned about rising inflation. Various policymakers said they would be open to speeding up the taper of their bond-buying programme if high inflation held and move more quickly to raise interest rates. Data on Wednesday showed U.S. jobless claims were at a 52-year low, consumer spending increased more than expected in October and inflation was rising.
But on Thursday the dollar’s upward trend – which has seen it gain around 2.7% this month – paused slightly, with the dollar index down 0.1% at 96.707 at 1242 GMT, compared to the 16-month high of 96.938 it reached late on Wednesday….
