Greenback reaches 5-week maximum on Fed rate lift expectations

On Wednesday, the evergreen buck reached five-week maximums versus a currency basket because Fed Chair Jerome Powell told that the American economic outlook still appears to be bright, spurring bets on further Fed rate lifts in 2018.

Assessing the US currency’s values versus a bunch of key currencies, the US dollar index rallied 0.18% being worth 90.47, thus showing the highest value since January 22.

Delivering a speech before Congress, a newly-appointed Fed Chair Powell told that the major US financial institution is still on track to gradually lift interest rates just to keep the American economy on an even keel amid reviving surge and inflation.

He added that his outlook for the American economy has improved since December.

The remarks backed hopes that the American major financial institution might deliver up to four rate lifts in 2018, rather than the three it had previously projected.

Hopes for soaring borrowing costs tend to underpin the evergreen buck because higher rates make the American currency more attractive to revenue-seeking traders.

The common currency dived to three-week minimums versus the evergreen buck, with EUR/USD sliding 0.18% trading at 1.2210.

Versus the Japanese yen, the US currency declined, with USD/JPY diving 0.16% hitting 107.17.

The Japanese yen rallied after the Bank of Japan cut bond purchases, rekindling rumors that it’s getting closer to an exit from its huge stimulus program.

BOJ representatives told that adjustments to debt purchasing operations shouldn’t be regarded as hints at the upcoming monetary policy.

The Japanese yen was also backed after softer than anticipated Chinese factory data put pressure on risk appetite.

The common currency dived to its weakest value for five months versus the Japanese yen, with EUR/JPY sagging 0.4% being worth 130.77.

The British pound slumped versus the greenback, with GBP/USD decreasing 0.22% hitting 1.3875.