Fed minutes support dollar’s strengthening

<p>The dollar rose in value yesterday.</p>

The US dollar saw a boost to its value yesterday (August 22nd) on the back of the release of the latest minutes from the Federal Reserve.

Although the Fed did not indicate when the winding down of its monetary stimulus package will take place, the currency still strengthened.

According to Andy Scott, premier account manager at foreign currency exchange brokers HiFX, the dollar bounced back from a two-month low against the pound by recording a one per cent jump in value after the minutes were released by the Fed.

"It also strengthened against the euro though by less, having been at a six-month low against the single currency of 1.3450 on Tuesday," he said.

Mr Scott added that the current policy divergence between the US and European central banks is expected to favour the dollar in the coming weeks and months.

Earlier this week, the Indian currency the rupee dropped to a new record low against the US dollar. It has slipped by 16 per cent against the dollar in the last three months.

Find out about commodities trading and learn CFD strategies at City Index

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.