Dollar Rises Against Major Counterparts

(RTTNews) - The U.S. dollar climbed higher on Thursday, continuing to benefit from the latest interest rate hike by the Fed, and hawkish comments from the central bank Chairman Jerome Powell.

The Fed raised its benchmark rate by 75 basis points to a range of 3.75-4% on Wednesday.

"It is very premature to be thinking about pausing," Powell said in his post-meeting press conference. "People when they hear 'lags' think about a pause."

"It is very premature, in my view, to think about or be talking about pausing our rate hikes. We have a ways to go," he added.

Data from the Commerce Department showed the U.S. trade gap widened to a three-month high of $73.3 billion in September, up from a downwardly revised $65.7 billion in August. Exports were down 1.1 percent at $258 million, while imports increased by 1.5% to $331.3 million in the month.

Data released by the Labor Department showed jobless claims fell by 1,000 to 217,000 in the week ended October 27th.

Data from Markit Economics showed the S&P Global US Composite PMI was revised higher to 48.2 in October 2022 from a preliminary estimate of 47.3, compared with September's 49.5

Data released by the Commerce Department showed new orders for US manufactured goods rose by 0.3% in the month of September, up from a revised 0.2% uptick in the prior month. Orders for durable goods rose by 0.4% in September, after seeing a 0.2% increase a month earlier.

The Institute for Supply Management's report showed the ISM non-manufacturing business activity in the U.S. fell to a reading of 55.7 points in October from 59.1 in the previous month.

The dollar index surged to 113.15 in early New York session and stayed firm right through the day's session. It was last seen at 112.99, up nearly 1.5% from the previous close.

Against the Euro, the dollar firmed to 0.9750 from 0.9818.

The dollar strengthened to 1.1157 against Pound Sterling, gaining from 1.1392. The Bank of England too raised its benchmark lending rate by 75 basis points, the biggest hike in 33 years.

The current tightening cycle that began last December has taken the bank rate to the highest since November 2008.

The BoE expects the economy to shrink 0.5% in the third quarter and by 0.3% in the fourth quarter of this year. The economy is projected to remain in recession throughout next year and the first half of 2024, and to recover only gradually thereafter.

In September, inflation was 10.1%, the highest since the series began in January 1997. The BoE expects inflation to peak at around 11% in the fourth quarter of this year.

Against the Japanese currency, the dollar firmed to 148.27 yen, rising from 147.93 yen.

The dollar gained in strength against the Aussie, firming to 0.6289, up nearly 1% from the previous close.

The Swiss franc dropped to 1.0135 a dollar, from 1.0033, while the Loonie dropped to 1.3747 a U.S. dollar.