The US dollar index rose today, Friday, to record a strong bullish performance against other currencies, to achieve the largest weekly gains in nearly seven months, coinciding with several developments that affected its performance, especially the results of the US Federal Reserve meeting related to the pace of tightening monetary policy, and the following are the most prominent influences on the movements of US dollar today:
The US Federal Reserve’s meeting came last Wednesday, where officials discussed important decisions related to the pace of raising interest rates and tightening monetary policy, and the Committee expects that with inflation stabilizing above 2% and a strong labor market, it will soon be appropriate to raise interest rates, and the US Federal Reserve confirmed the termination of the bond purchase program as soon as possible. It is expected, specifically in March.
Jerome Powell’s statements have directly stated that the US economy no longer needs easing policy, which indicates that this year will be a turning point for US policies from easing to tightening policies, which will have a very strong impact on the dollar’s movements in particular, and all major currencies other.
The US dollar
Accordingly, experts at Nomura issued their expectations for the upcoming US Federal Reserve decisions during next March, and experts indicated that Jerome Powell emphasized more than once that there are differences between the previous monetary policy normalization and the expected monetary policy normalization during next March, especially since the economic conditions are strong. Very, and in light of these statements, the US Federal Reserve is expected to raise interest rates by 50 basis points during next March, which inspires optimism in the currency market regarding the strength of the US dollar.
Experts at Nomura suggested that the US Federal Reserve will raise interest rates 3 additional times by about 25 basis points in May, June and July, and then, after that, the US Federal Reserve may decide to keep the interest rate unchanged until next December and decide to raise it by an additional 25 basis points by the end of the year. And all this will have a positive effect on the US dollar.
The US dollar index continues to improve with the current market developments loyal to it, as the dollar index is still trading above the level of 97 points, as it is currently trading at the level of 97.373 points, with an increase of 0.17% and awaits any new developments in the markets before taking a clear direction in the coming period .