By Gertrude Chavez-Dreyfuss
NEW YORK, Nov 1 (Reuters) - The U.S. dollar rose on Wednesday after the Federal Reserve left
interest rates unchanged but did not rule out another hike as it acknowledged the economy's unexpected
resilience despite the central bank's aggressive tightening launched more than a year ago.
The dollar index was last up 0.3% at 106.97. It has traded sideways since hitting an almost
one-year high of 107.34 in early October on the back of a sharp rise U.S. bond yields driven by strong
economic growth.
Against the yen, the dollar dropped 0.4% to 151.09. The currency pair typically tracks
movements in U.S. two-year Treasury yields, which fell 6.9 basis points to 5%.
Fed officials, in a policy statement after a two-day meeting, unanimously agreed to leave the benchmark
overnight interest rate in the 5.25%-5.50% range where it has been since July.
The Fed's latest statement noted that with job gains still "strong" and inflation still "elevated," the
central bank continues to consider "the extent of additional policy firming that may be appropriate to
return inflation to 2% over time."
That said, U.S. interest rate futures have added to bets that the Fed is done raising its policy rate
and will start cutting rates by June next year. Bets on a rate hike in December and January have been pared
back to 19% and 30%, respectively, down from 28% and 39% late on Tuesday.
"While a further hike, as signaled by the September 'dot plot' remains possible, given the resilience of
the labor market and upside risks to the inflation outlook, the longer the FOMC remain on pause, the slimmer
the already minimal chances of such action become," said Michael Brown, market analyst, at TraderX in
London.
"Nevertheless, the 'higher for longer' policy stance remains in place, with markets seemingly premature
in fully pricing the first 25 bp cut by next July."
In other currencies, the euro fell 0.3% against the dollar to $1.0547 following the Fed's
statement and after data on Tuesday showed a fall in euro zone growth and inflation.
Sterling slid 0.4% versus the dollar to $1.2111.
========================================================
Currency bid prices at 2:44PM (1844 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Dollar index 107.0200 106.6700 +0.35% 3.411% +107.1100 +106.6100
Euro/Dollar $1.0525 $1.0576 -0.49% -1.78% +$1.0581 +$1.0517
Dollar/Yen 151.1750 151.7400 -0.35% +15.33% +151.6750 +150.8250
Euro/Yen 159.12 160.41 -0.80% +13.41% +160.4300 +159.0800
Dollar/Swiss 0.9103 0.9105 +0.00% -1.53% +0.9112 +0.9071
Sterling/Dollar $1.2105 $1.2154 -0.39% +0.10% +$1.2164 +$1.2096
Dollar/Canadian 1.3894 1.3875 +0.13% +2.54% +1.3899 +1.3843
Aussie/Dollar $0.6358 $0.6338 +0.36% -6.70% +$0.6394 +$0.6319
Euro/Swiss 0.9579 0.9627 -0.50% -3.19% +0.9628 +0.9569
Euro/Sterling 0.8692 0.8702 -0.11% -1.72% +0.8712 +0.8684
NZ $0.5822 $0.5826 -0.07% -8.32% +$0.5858 +$0.5790
Dollar/Dollar
Dollar/Norway 11.2280 11.1820 +0.28% +14.26% +11.2450 +11.1640
Euro/Norway 11.8269 11.8189 +0.07% +12.70% +11.8427 +11.7895
Dollar/Sweden 11.2345 11.1683 +0.02% +7.94% +11.2412 +11.1540
Euro/Sweden 11.8146 11.8126 +0.02% +5.96% +11.8365 +11.7877
(Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by Saqib Iqbal Ahmed; Editing by Kirsten
Donovan)
US dollar firms after Fed leaves rate-hike option open
November 01, 2023 at 02:58 pm EDT
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