16.09.202618:42:45UTC+00US Dollar Rises to 7-Week High

The dollar index climbed above 100 on Wednesday for the first time in nearly seven weeks after the Federal Reserve raised interest rates by 25 bps. The move, unanimously approved by the FOMC and widely anticipated by markets, followed data showing persistently elevated core inflation, low unemployment, and a sharp rebound in retail sales that highlights the resilience of consumer demand despite faster price growth.

Fresh projections from the policy-setting committee indicated a loose consensus that at least one additional rate increase is likely this year. At the same time, the Fed revised its unemployment outlook lower and upgraded its growth forecasts. The decision helped support the dollar after earlier comments from Chairman Warsh had fueled doubts about the Fed’s resolve to curb inflation through higher policy rates rather than alternative tools, prompting renewed interest in precious metals and other safe-haven currencies.

Elsewhere, the Bank of England is expected to leave interest rates on hold at its meeting tomorrow, while the Bank of Japan is widely seen as preparing to raise rates.