Forex News: U.S. Dollar Rises On Hawkish FOMC Rate Outlook

U.S. Dollar Rises On Hawkish FOMC Rate Outlook

(RTTNews) - The U.S. dollar strengthened against other major currencies in the European session on Wednesday, as traders await the minutes of the Federal Open Market Committee (FOMC) meeting, scheduled for release later in the day.

At the conclusion of the policy meeting in December, the Fed took a more hawkish position and indicated that it would slow the pace of rate cuts in 2025. Fed Bank of Atlanta President Raphael Bostic said on Tuesday that officials should be cautious with policy decisions, given uneven progress on lowering inflation.

Bostic underlined the necessity of leaning toward maintaining high interest rates in order to guarantee the accomplishment of price stability objectives.

A softer risk tone, U.S-China trade war concerns, geopolitical tensions, and the uncertainty surrounding U.S. President-elect Donald Trump's tariff proposals, also led to the upturn of safe-haven USD.

Traders also await the U.S. labor market reports - the ADP report on private-sector employment and Weekly Initial Jobless Claims due later today.

In the European trading today, the U.S. dollar rose to a 5-day high of 0.9121 against the Swiss franc, from an early low of 0.9087. The greenback may test resistance near the 0.92 region.

Against the euro and the pound, the greenback advanced to 2-day highs of 1.0316 and 1.2441 from early lows of 1.0358 and 1.2494, respectively. If the greenback extends its uptrend, it is likely to find resistance around 1.01 against the euro and 1.22 against the pound.

The greenback edged up to 158.29 against the yen and 1.4369 against the Canadian dollar, from early lows of 157.91 and 1.4339, respectively. On the upside, 163.00 against the yen and 1.45 against the loonie are seen as the next resistance level for the greenback.

Looking ahead, U.S. mortgage approvals data, U.S. weekly jobless claims data, U.S. EIA crude oil data and U.S. consumer credit change for November are slated for release in the New York session.

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