The U.S dollar, on Wednesday, March 1, surged against the yen and the euro, as investors increasingly shifted their focus to the Federal Reserve’s rate decision later in March.
Against its Japanese counterpart, the greenback USDJPY, +0.88% was changing hands at ¥113.76, up 0.9% from ¥112.76 late Tuesday in New York. Euro-dollar EURUSD, -0.4066% was lower at $1.0535, compared with $1.0575 late Tuesday.
The WSJ Dollar Index BUXX, +0.45% , a measure of the U.S. dollar against a basket of major currencies, was up 0.4% at 91.50. The ICE U.S. Dollar Index DXY, +0.47% , which narrows that comparison to six currencies, stood at 101.75, up 0.4%.
Comments from Fed officials that the central bank will carefully consider whether to raise short-term interest rates as soon as at its meeting in two weeks was the latest dollar driver.
Investors largely showed muted reaction to Trump’s speech. “I think it’s safe to say that there’s nothing new from the speech,” including the specific amount of corporate tax cuts, said Takuya Kanda, senior researcher at Gaitame.Com Research Institute.
The Fed chorus for a rate hike has widened in recent days. San Francisco Fed President John Williams said in a speech in Santa Cruz, Calif., “in my view, a rate increase is very much on the table for serious consideration” at the March 14-15 meeting.
And New York Fed President William Dudley said on CNN International that the case for raising rates “has become a lot more compelling” in light of the economy’s current and expected performance. An increase could come “in the relatively near future,” he said.
