The dollar retains its strength ahead of the Fed

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

The U.S. dollar continued to advance on Tuesday and retains strength early Wednesday as fear reigns in financial markets ahead of the US Federal Reserve decision.

Market participants had long anticipated a 50 basis point hike, but on Monday market talk suggested the central bank may opt for a steeper 75 basis point hike. In addition, US policymakers will present new economic projections, which could lead to a sustained aggressive stance, if the new scenario portends stagflation.

On the other side of the pond, Klaas Knot, Member of the ECB hinted at more rate hikes in October and December, while sticking to a 25 basis point move in September.

The UK released mixed employment data, with the jobless rate rising to 3.8% in April from 3.7% the previous month, while the number of people claiming jobless benefits fell by 19.7,000 in May.

EUR/USD is hovering around 1.0400 while GBP/USD is trading at its lowest since March 2020 at 1.1980. AUD/USD extended its slide to 0.6850, while USD/CAD is trading around 1.2955 as poor performance in equities and falling gold and oil prices undermined sentiment. demand for currencies linked to commodities.

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

Yields on US government bonds continued to climb, with that of the 10-year Treasury note peaking at 3.489%, its highest level in more than a decade.


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