US Dollar (USD) Exchange Rate Forecast to Rally after Knee-Jerk Reaction to Fed Policy Statement
The US Dollar to Euro (USD/EUR) exchange rate advanced by around 1.75% on Thursday afternoon.
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The US Dollar to Pound Sterling (USD/GBP) exchange rate strengthened by around 1.38%.
In the immediate aftermath of the Federal Reserve Interest rate decision, in which rates were kept on hold, the US Dollar softened considerably. Although the following press conference saw Fed Chair Janet Yellen drop tired rhetoric like the word ‘patience’ with regard to rate hikes, the comments were mostly deemed as dovish.
However, with market sentiment dampened amid tensions in Greece and with bearish crude prices, the US Dollar recovered its losses overnight. Some positive results from labour market data has boosted the US Dollar further as Yellen linked rate revisions to positive results from jobs data.
The US Dollar to Euro (USD/EUR) exchange rate is currently trending in the region of 0.9380.
The US Dollar to Pound Sterling (USD/GBP) exchange rate is currently trending in the region of 0.6777.
US Dollar (USD) Exchange Rate Rallies on Safe-Haven Demand
With the situation in Greece on thin ice and with increasing potential for a Geek exit from the Eurozone, market sentiment dampened considerably. Tanking crude prices also weighed on investor risk appetite. This saw heightened demand for safe-haven assets, causing the US Dollar to advance versus nearly all of its most traded currency competitors.
‘I continue to be worried,’ European Commission President Jean-Claude Juncker said Wednesday about the talks with Greece. ‘I’m not happy with the progress that’s been achieved over the last few days.’
Thursday’s US economic data has produced mixed results on Thursday, but a positive result from Initial Jobless Claims gave rate hawks something to smile about given that Yellen stated that rate revisions would be subject to labour market data results. Initial Jobless Claims was forecast at 293,000 benefits claimants, but the actual result saw only 291,000. A slight uptick in Continuing Claims has somewhat micrified the positive initial result however.
US Dollar (USD) Exchange Rate Forecast to Trend Higher
With little by way of influential domestic data to curb the trend, the US Dollar is likely to continue trending higher over the course of Thursday’s trade. Fluctuations are a high possibility on Friday, however, as the current surge could be seen as overdone. An absence of any significant domestic data on Friday could see volatility cool somewhat.
The US Dollar to Euro (USD/EUR) exchange rate was trending within the region of 0.9163 to 0.9413.
The US Dollar to Pound Sterling (USD/GBP) exchange rate was trending within the parameter of 0.6661 to 0.6797.