US dollar is mostly higher today, gaining ground as Forex traders look forward to the possibility of a rate hike from the Federal Reserve. Additionally, there are indications that the role of the US dollar on the Forex market might be changing.
Even though the US Federal Reserve kept its benchmark the same last week, the greenback is on the rise, thanks in large part to expectations for a rate hike in the relatively near future. Even though there were slight whispers of negative interest rates, few people are taking those thoughts seriously and more are looking forward to increased rates.
Another interesting development, reports Bloomberg, is a change in the role of the greenback in world markets. According to a report from Société Générale, the US dollar is moving more toward performing in accordance with a global mood barometer, rather than as a funding currency or safe haven.
In some cases, the dollar has been moving in tandem with equities and higher yields, rather than inversely to those performances. For now, though, a lot of the dollar’s strength comes from expectations related to it, and it will be interesting to see what happens next.
At 14:00 GMT the dollar index is up to 96.222 from the open at 95.917. EUR/USD is down to 1.1145 from the open at 1.1190. GBP/USD is down to 1.5403 from the open at 1.5509.
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