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The Dollar Posted New Gains Against Major Peers


Triumphantly, the American dollar pushed through and ended up on top by close of trade Friday. This coming on the back of investors tiresomely waiting for more hints at the Fed’s inflation plan for the coming months.

With the morning came a steady and low-volatility market stream in Asia. Both the euro and the yen, however, were lower and remained so until the close.

Last week, the USD beat the euro squarely, registering its best pairing against the peer it had seen since March. Of course, this was just after the inflation meeting of the Fed that rocked so many investors’ pockets.

Granted, comments from certain Federal officials after the initial bombshell has eased the disquiet among many investors who were hoping for a more subdued approach to inflation.

Certain experts have been quoted as believing that the core personal consumption expenditures index will post year-on-year gains of 3.4%. This would be a meteoric rise even compared to the 30-year high recorded last year.

“The dollar can jump if inflation surprises to the upside,” commented Joe Capurso, the head of international economics at the Commonwealth Bank of Australia. “Upside inflation surprises have been the trend in the U.S. recently,” MetaNews reported.

The robust dollar has reigned in many of its competing peers over the past few days, even in the wake of raucous changes brought on by the Fed’s policy changes.

The Kiwi dollar has snuck toward its 200-day average of $0.7063, but it stayed within distant sight of February highs above 74 cents. In Australia, despite increasing terms of trade, the Australian currency held firm at $0.7584.

“A more balanced dollar outlook prevails after the Fed’s decisive policy shift,” Westpac strategist Sean Callow said.

“The Australian dollar’s strong support from commodity prices produces fair value estimates in the mid-0.80s,” he remarked. Triumphantly, the American dollar pushed through and ended up on top.


Billy Houghton

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