A hawkish FED held interest rates steady. The greenback climbed to a 16-month peak after falling broadly after the US midterm elections.
However, the currency bounced back. Dollar renewed its strength against most major currencies, underpinned by the robust U.S. economy and rising interest rates.
The Fed is widely expected to raise interest rates in December, which would be its fourth hike this year. Fed signaled further tightening. It pointed to a healthy economy that was marred only by a dip in the growth of business investment.
The dollar traded higher against its major traded rivals at a one-week high at 96.916. This was not far from a 16-month high of 97.2 brushed on Oct. 31.
Forex – Commodities – Hawkish FED kept interest rates unchanged
In Forex markets, investors focus shifted back to the divergence between the monetary policies of the United States and other major economies.
In Japan, where interest rates are seen staying extremely low, the yen is near a five-week low against the dollar. Yen has fallen 2.2% over the last 10 trading sessions. However, on Friday it reversed course to trade up 0.2%.
Elsewhere, the euro traded at $1.1351, down 0.1%. A standoff between the EU and Rome over the budget deficit and concerns over the bloc’s slowing economic growth have dragged on the euro. The single currency has fallen 4.2% versus the dollar over the last six months.
Other major currencies largely traded in narrow ranges.
The pound changed hands at $1.3015, down 0.3%. The sterling has benefited recently from growing investor expectations that Britain is close to reaching a deal with the EU.
The Australian dollar lost 0.2% to trade at $0.7241. Aussie tends to struggle when sentiment toward China – Australia’s largest trade partner – weakens.
Oil dropped to multi-month lows on Friday as global supply increased. Therefore, investors worried about the impact on fuel demand of lower economic growth and trade disputes.
Benchmark Brent crude LCOc1 fell below $70 a barrel for the first time since early April. It was down more than 18% since reaching four-year highs at the beginning of October.
Brent dropped $1.52 to a low of $69.13 before recovering to around $69.85. It was down more than 4% for the week and approaching 16% this quarter.
Sources: Reuters, CNN money, BBC
PLEASE NOTE The information above is not investment advice.