It was widely anticipated that the federal reserve will increase the main interest rate by 75 basis points on Wednesday, to a range of 3.75 percent to 4.0 percent.
The impact of the council’s statement’s suggestions that future rises will be lesser caused the dollar to initially decline, but it later recovered and began to rise when Federal President Jerome Powell declared that raising borrowing costs would be necessary to fight inflation.
With Powell’s comments, any hopes that the US Federal Reserve would soon adopt a less stringent stance were dashed, and the dollar rose to its highest level in two weeks against the euro, recording $ 0. 9810.
The US Treasury’s revenues have been particularly sensitive to interest rate changes over the past two years, with the most recent peak of 11 basis points at 4.68 percent being the highest level since July 2007.
The dollar index rose 0. 5 percent during the day to 112. 70, at the highest increase in a week.
Before the England Bank meeting, during which it is anticipated to raise interest rates by three quarters of a percentage to 3 percent, which would be the highest increase since 1989, the British pound dropped 0.5% versus the dollar to $ 1. 13325, but just 0.1% against the euro to 86.22 pence.
Due to the slowdown in the economy and the sharp increase in the cost of borrowing by the British government during the summer, analysts contend that the Bank of England is not in the same position as the Federal Reserve.
Customers continue to expect further government assistance to maintain the faltering currency as the Japanese yen dropped 0.2% to 148.18 for the dollar.
The federal signal to keep raising interest rates causes the dollar to increase.
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