The US dollar index rose to its highest peak in nearly seven weeks on Thursday. The Federal Reserve released the minutes of its last policy meeting. However, it did not change traders’ perspectives on further rate hikes. They still expect the agency to continue its tightening policy in the short term, at least.
The dollar index added 0.36% in the previous session. The minutes of the Federal Open Market Committee meeting from January 31 to February 1 showed that almost all officials agreed to reduce the pace of interest rate increases. But they also indicated that if inflation remained high, they would take additional steps to bring it down.
On Thursday, the index hit 104.68 against the basket of six major currencies today, jumping to its highest level since January 6. It dipped a bit later but continued to trade steadily near that point.
On the other hand, the euro briefly plunged to $1.0586, reaching its lowest level this week. Eurozone inflation data came out today but failed to influence the common currency. The report showed that inflation spiked slightly in January, but also confirmed that price growth has already passed its peak.
Also, the Japanese yen traded in the red. The dollar rose to 134.94 yen. It changed hands just below its two-month high of 135.2 hit on Tuesday.
In Europe, the British pound fell a bit to $1.2029 today. The Swiss franc also fell to 0.9318 per USD. However, the Australian dollar rose 0.4%. It traded at $0.6833 at last, recapturing gains after hitting a nearly seven-week low of $0.6795 in the previous session.
What about emerging market currencies?
Asian emerging market currencies rose against the US dollar after the latter dipped slightly from its peak. Emerging market stocks also rose today after falling to a seven-week low on Wednesday. The MSCI EM stock index rose 0.5%.
Shares in South Korea were up 0.8% today. The country’s central bank kept interest rates stable. Regional currencies rose 0.1% against the dollar. However, the Turkish lira was almost flat at 18.878 against the USD. The currency was still hovering around its all-time low.
Meanwhile, the South African rand plunged 0.6%. You lost all your earnings from the previous session. The currency rallied on Wednesday thanks to the finance minister’s budget speech, but this rise was short-lived. On Thursday, the Russian ruble also soared 0.6%.
