The U.S. dollar index rallied to its highest peak in almost seven weeks on Thursday. The Federal Reserve released the minutes from its last policy meeting. However, it didn’t change traders’ perspectives about further rate hikes. They still expect the agency to continue with its policy tightening for the near term, at least.
The dollar index added 0.36% in the previous session. Minutes from the January 31 – February 1 Federal Open Market Committee meeting showed that almost all officials agreed to slow the pace of interest rate increases. But they also indicated that if the inflation remained high, they would take additional measures to bring it down.
On Thursday, the index hit 104.68 against the basket of six major currencies earlier today, jumping to its highest level since January 6. It lowered slightly later but continued trading steadily near that point.
On the other hand, the euro plummeted to $1.0586 briefly, reaching its lowest level this week. Eurozone inflation data came out today, but it failed to influence the common currency. The report showed that inflation soared slightly in January, but it also confirmed that price growth is already past its peak.
Moreover, the Japanese yen traded in the red. The greenback surged forward to 134.94 yen. It exchanged hands a bit lower from its two-month high of 135.2 hit on Tuesday.
In Europe, the British pound declined a bit to $1.2029 today. The Swiss franc also lowered to 0.9318 per USD. However, the Aussie dollar surged forward by 0.4%. It traded at $0.6833 at last, recovering the gains after hitting an almost seven-week low of $0.6795 in the previous session.
What about the EM currencies?
Asian EM currencies climbed up against the U.S. dollar after the latter lowered slightly from its high. Emerging market shares also rallied today after plunging to a seven-week low on Wednesday. The MSCI EM equities index soared by 0.5%.
Stocks in South Korea jumped by 0.8% today. The country’s central bank kept interest rates steady. Regional currencies soared by 0.1% versus the greenback. However, the Turkish lira remained almost the same at 18.878 against the USD. The currency still hovered around its record low.
Meanwhile, the South African rand plummeted by 0.6%. It lost all of its gains from the previous session. The currency rallied on Wednesday thanks to the finance minister’s budget speech, but this surge was short-lived. On Thursday, Russia’s rouble also soared by 0.6%.