Home Daily Commentaries USD continues to weaken after Fed rate hike

USD continues to weaken after Fed rate hike

Daily Currency Update

Despite the Federal Reserve’s 10th successive rate hike yesterday, US Dollar continues to weaken. The Fed is expected to be done hiking rates, with a forecasted cut in rates for the third quarter. Tomorrow’s US Jobs report release could have an impact on the USD. The dollar index (DXY) continues to edge higher after reaching market lows overnight largely due to yesterday’s Fed announcement. US unemployment claim numbers were better than analysts’ forecasts of 247,000 jobless claims at 230,000 claims.

Amid the ongoing banking crises, PacWest bank’s share price was cut in half after Bloomberg reported it was considering a sale. According to CNN, the bank responded by saying they are exploring “all strategic options.”

Key Movers

The EUR/USD pair was down just slightly during the European trading session in the 1.085-1.1127 range. This comes after the European Central Bank (ECB) hiked interest rates by 0.25% to 3.75%. Analysts say that further rate hikes are possible later in 2023. The ECB also announced that it will be slowing its pace in relation to rate hikes which initially caused the EUR to fall.

The GBP/USD pair is growing stronger amid the USD weakness. The pair rose to 1.2590, nearing it’s one year high. With a bullish EUR and a weak dollar, market participants are watching as the GBP rises.

West Texas Intermediate (WTI) crude oil prices slid downward this morning due to the concern of an American economic slowdown. Currently, crude oil prices are regaining minor ground at 68.44 a barrel.

Expected Ranges

  • EUR/USD: 1.0851 - 1.1127 ▼
  • GBP/USD: 1.2354 - 1.2577 ▲
  • AUD/USD: 0.6623 - 0.6782 ▼
  • USD/CAD: 1.3352 - 1.3678 ▼