The Federal Reserve’s hawkish comments shot up the likelihood of rate hike in March. Additionally, US consumer prices exceeded analyst’s expectations, soaring to the highest point in four years. Despite the flurry of positive news for the US economy, the greenback is edging downwards, unimpressed by the rhetoric of a strengthened economy.
The Fed’s tedious approach to rate hikes has meant that the markets are prepared for the increase.
Volatility in the markets has eased, as investors hold tight for a Donald Trump inspired nudge. Since the election of Trump, traders have started to shun economic data in favour of Trump-initiated headline news.
The EURUSD is trading up 0.3%, at $1.06.
The Fed are expected to raise interest up to four times this year. Perhaps the dollar is holding tight, waiting for the organisation to take action instead of rehashing what the market already knows; that the US economy is growing and the Fed will raise rates.