The dollar is becoming stronger

The dollar is becoming stronger
The dollar is becoming stronger

The dollar is becoming stronger

The dollar has dropped from its six-week high and is now showing signs of increasing in strength, as supported by the Federal Reserve.

The dollar regained strength after earlier losses in Europe on Thursday, staying close to its recent high point. This was due to the Federal Reserve's recent meeting minutes which suggested more interest rate increases in the future.

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What is current value of the dollar?

Dollar index, which measures value of the U.S. dollar against basket of six other currencies, rose by 0.1% to 104.56, near highest level in six weeks (104.67).

Minutes from the federal government.

At February meeting, Federal Reserve officials decided to raise interest rates by quarter percentage point in order to gain more insight into how close economy is to reaching target inflation rate of 2%.

Some policymakers wanted to raise interest rates by 50 basis points, but their meeting happened before jobs report for January was released. Report showed that recession was not likely.

James Bullard, President of the St. Louis Federal Reserve, has stated that to control inflation Fed will have to increase interest rates up to 5.25-5.50%, which is more than half percent higher than current rate.

At January 31-February 1 meeting, most of those present agreed that raising federal funds target rate by 25 basis points was good idea. Decision was confirmed in Wednesday's meeting minutes, giving Federal Reserve more flexibility to increase rates in future.

Federal Reserve has indicated that it is taking a less aggressive approach to fighting inflation and raising interest rates, which has caused gold prices to decrease slightly. Brian Lan, managing director of Singapore-based Gold Silver Central, confirmed this.

The exchange rate of the US dollar against other currencies.

The US Dollar to Euro exchange rate increased by 0.1%, bringing the rate to 1.0610, which is slightly higher than the six-week low of 1.0598 from the day before the final reading of January's Eurozone Consumer Price Index was released.

The European Central Bank is likely to keep its inflation rate in a limited range as the annual rate is predicted to rise from 8.5% to 8.6%. This indicates that controlling inflation will remain a challenge in the near future.

The British Pound to US Dollar exchange rate rose by 0.1% to 1.2057, the US Dollar to Australian Dollar exchange rate increased by 0.4% to 0.6831, and the US Dollar to New Zealand Dollar exchange rate also rose by 0.4% to 0.6242 due to the Reserve Bank of New Zealand's decision in September this week which involved an increase in interest rates - the highest level since 2008 - and further hikes in forthcoming months.

The USDJPY currency pair was unchanged at 134.88 in anticipation of Kazuo Ueda's upcoming address to Parliament on Friday, which may shed light on the Bank of Japan's future plans. This has caused much debate over how the BOJ will regulate bond yields.

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