23 Nov 2022
The Dollar stayed firm on Wednesday ahead of the minutes of the latest Federal Reserve meeting to be published today.
The U.S. Dollar index – gauging the greenback against six rivals – remained broadly flat at 107.1, after trimming 0.65% the day before as sentiment rallied bolstering riskier currencies.
This year, the Dollar has broadly rallied against every major currency, lifted by massive rate hikes aimed at taming soaring inflation. However, due to recent cooler-than-forecast inflation data, investors have curbed bets on future rate hikes.
All investor focus is on the upcoming minutes from this month’s Federal Reserve meeting to provide an indication of the rate outlook, Reuters reports.
“At the moment FX traders are likely to be torn between the continued hawkish comments by Fed members and the prospect of what the Fed will do in 2023,” according to currency analysts at Commerzbank.
Elsewhere, the New Zealand Dollar rose 0.7% on Wednesday, close to a three-month high, after the Reserve Bank of New Zealand increased interest rates by a record amount, despite cautioning the economy could be in recession for a year. At the time of writing, the New Zealand Dollar was up 0.3% at $0.61715.
The country’s central bank increased its benchmark rate by 75 basis points to 4.25%, the highest of any G10 economy, and signalled the pace of further hikes may need to be increased.
In addition, the Euro gained 0.1% against the Dollar at $1.03090, following new data showing the business activity slump in the eurozone marginally eased this month.
Whereas the Pound remained broadly unchanged at $1.18915. This followed on from another poll revealing UK economic activity declined at its fastest pace in close to two years in November.