Dollar Rises Against Major Counterparts Ahead Of Fed Rate Decision
(RTTNews) - The U.S. dollar firmed against its major counterparts on Tuesday amid bets the Federal Reserve will announce a sharp hike in interest rates at the end of its monetary policy meeting on Wednesday.
The Fed is widely expected to hike rates by another 75 basis points. Some analysts expect the hike could even be by 100 basis points.
The central bank is expected to raise the fed dunds rate to 4.5% by early next year.
CME Group's FedWatch Tool is currently indicating an 84% chance of a 75 basis points rate hike and a 16% chance of a 100 basis point rate hike.
Amid bets of an aggressive rate hike, the yield on 2-year U.S. Treasury note rose to its highest level since 2007. The yield on the benchmark ten-year note jumped to a new eleven-year high.
The dollar index climbed to 110.29 earlier this afternoon, gaining more than 0.5%.
Against the Euro, the dollar strengthened to 0.9972, gaining over 0.5% from 1.0025.
The dollar is trading at 1.1384 against Pound Sterling, firming from 1.1435.
Against the Japanese currency, the dollar is strong, fetching 143.75 yen a unit, compared with 143.20 yen a unit on Monday.
The dollar is firm against the Aussie at 0.6689 and is roughly flat against Swiss franc at CHF 0.9641.
The Loonie has weakened to 1.3368 against the U.S. dollar from 1.3253, after data showed a slower than expected increase in Canadian inflation. The drop in crude oil prices weighed as well on the Canadian currency.
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