Forex Today: Dollar retains its strength ahead of the Fed

Valeria Bednarik FXStreet

What you need to take care of on Wednesday, June 15:

The American dollar kept advancing on Tuesday, and retains its strength early Wednesday, as fear rules financial markets ahead of the US Federal Reserve decision.

Market players had long ago anticipated a 50 bps hike, but on Monday, market talks suggested the central bank may go for a steeper hike of 75 bps. Also, US policymakers will present fresh Economic Projections, which may lead to a sustained aggressive stance, should the new scenario hint at stagflation.

Across the pond, ECB’s member Klaas Knot hinted at more rate hikes in October and December, although sticking to a 25 bps move in September.

The UK released mixed employment data, as the jobless rate rose to 3.8% in April from 3.7% in the previous month, while the number of people claiming jobless benefits fell by 19.7K in May.

The EUR/USD pair hovers around 1.0400 while GBP/USD trades at its lowest since March 2020 at 1.1980. The AUD/USD pair extended its slump to 0.6850, while USD/CAD trades around 1.2955 as the poor performance of equities and plummeting gold and oil prices undermined demand for commodity-linked currencies.

Wall Street remained under selling pressure, although the Nasdaq Composite was able to post a modest gain of 0.10%.

US government bond yields continued to rally, with that on the 10-year Treasury note peaking at 3.489%, its highest in over a decade.

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Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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