The US dollar (USD) is holding on to Tuesday’s gains, triggered in part by hawkish comments from Federal Reserve (Fed) Governor Michelle Bowmanaccording to analysts of BBH Global Currency Strategy.
Fed comments give USD a boost
“Bowman cautioned that ‘we are not yet at the point where it is appropriate to lower the policy rate,’ adding that she remains prepared to raise the target range for the federal funds rate at a future meeting if progress on inflation stalls or even reverses.'”
“Meanwhile, Fed Governor Lisa Cook reminded market participants that ‘with significant progress on inflation and the labor market gradually cooling, at some point it will be appropriate to reduce the level of policy tightening. The timing of any adjustment will depend on the economic data and what they imply.'”
“The USD’s cyclical bullish trend remains intact. First, the Fed’s policy continues to diverge from that of most other major central banks. Second, the favorable US macroeconomic environment justifies an upward reassessment in the federal funds rate expectations. Third, June composite PMI data shows that growth momentum favors the US economy.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
