By Gina Lee
Investing.com – The dollar was up on Thursday morning in Asia, rising to its highest level in almost two months. Investors continue to digest the U.S. Federal Reserve’s in its .
The that tracks the greenback against a basket of other currencies edged up 0.14% to 91.332 by 1:02 AM ET (5:02 AM GMT). The index climbed nearly 1% during the previous session, its biggest gain since March 2020.
The pair was steady at 110.69.
The pair was up 0.22 % to 0.7627. Australian employment data for May released earlier in the day was better than expected, with the at 115,200. The fell to 5.1%.
Across the Tasman Sea, the pair gained 0.57% to 0.7089. Data released earlier in the day said that New Zealand’s GDP grew 1.6% and 2.4% in the first quarter. Both figures were higher than expected.
The pair was up 0.41% to 6.4232. Chinese economic data, released on Wednesday, said that grew a worse-than-expected 8.8% year-on-year in May while the was 5.2%.
The pair inched up 0.07% to 1.3997 but fell below the $1,400-mark.
The dollar hit an almost two-month high of $1.1984 against the euro on Thursday, extending its gain of about 1% from the previous session.
The Fed brought forward its projections for the first post-COVID-19 interest rate hikes into 2023 as it handed down its decision on Wednesday. An improving COIVD-19 situation, with states including California and New York re-opening, was cited for the reversal from the central bank’s previous stance that COVID-19 was weighing on the economy.
A majority 8 of 11 Fed officials forecast at least two quarter-point interest rate increases for 2023, despite pledging to maintain the current dovish policy for now to courage the ongoing recovery in the job market.
Meanwhile, inflation is expected to jump in 2021, even as price pressures are still expected to be temporary. Overall economic growth is also expected to hit 7%.
“The Fed’s super hawkish pivot should reinforce the lows and offer further near-term dollar support… a double whammy of higher rates and wobbly risk sentiment would result in positioning squeeze and the start of a new narrative,” possibly resulting in “a 2% broad USD rally through the summer months,” TD Securities analysts said in a note.
The benchmark was at 1.5890% on Thursday, after rallying to as high as 1.5940% from as low as 1.4820% the day before.
Investors now await decisions from other central banks, including the and later in the day, followed by the on Friday.
The strengthening dollar also hit cryptocurrencies, with bitcoin near the $38,624-mark following a 4.5% slide on Wednesday, and ether traded at $2,393.