The dollar stable after an unsurprising Fed, the yen strengthens

The dollar remained almost stable on Thursday against the main currencies the day after a rate hike by the American Federal Reserve (Fed) already anticipated by the markets, but the yen strengthened, driven by risk appetite.

The dollar index, which compares the greenback to major currencies, slipped 0.09% to 106.36 points around 8:00 p.m. GMT. Against the euro, it took 0.15% to 1.0185 dollars for one euro.

After Wednesday’s Fed announcement, the dollar fell sharply against the euro, as the Fed’s 75 percent rate hike was largely already priced in by the market.

Moreover, its president Jerome Powell hinted loser that „at a certain point it will be appropriate to slow down” the movement.

Second-quarter US GDP figures released on Thursday were poor, showing a 0.9% contraction from April to June, the second quarterly decline in a row. But they give hope that the slowdown will be moderate and that the Fed will be less strict in its monetary policy.

However, the dollar remained at high levels.

Asked at a press conference about the strength of the dollar and its impact on emerging markets, US Treasury Secretary Janet Yellen acknowledged „significant appreciation of the note” which may „create pressures in other parts of the world” and, with the rise in food and energy prices, „create real burdens (…) for the countries with the lowest incomes”.

Camille Nicholls

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