The dollar is actively declining against major world currencies Tuesday morning after speeches by members of the U.S. Federal Reserve (Fed).
The ICE index, which shows the U.S. dollar against six currencies (euro, Swiss franc, yen, Canadian dollar, pound sterling and Swedish krona), is down 0.4 percent, as is the broader WSJ Dollar Index.
The Fed may slow the pace of interest rate hikes, but it has no plans to interrupt the process itself just yet, Federal Reserve Bank (FRB) Cleveland President Loretta Mester told the Financial Times.
“It’s very easy to focus only on good news, but we don’t want to succumb to self-delusion. The cost of a hasty stop is too high,” she noted.
Mester is among the voting members of the Federal Open Market Committee (FOMC) in 2022, which decides interest rate levels.
In November, the Fed raised the rate by 75 basis points (bps) for the fourth consecutive meeting. The rate is now at its highest since January 2008 at 3.75-4% per annum. The Fed is expected to raise the cost of borrowing by 50 basis points in December.
The euro/dollar pair is trading at $1.0387 by 7:40 kk against $1.0340 at the close of Monday’s session; the euro is adding about 0.45%.
The dollar/yen exchange rate is down 0.2% at 138.66 yen from 138.93 yen at the end of last session.
The pound is up 0.4%, trading at $1.2005 versus $1.1960 the day before.
