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Federal Reserve Meeting Minutes Suggest Small Interest Rate Hike but no Boost for the Dollar

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On February 23, Lee Hardman, a foreign exchange analyst at Mitsubishi UFJ, said in a report that the minutes of the meeting of the Federal Reserve on Wednesday…

Federal Reserve Meeting Minutes Suggest Small Interest Rate Hike but no Boost for the Dollar

On February 23, Lee Hardman, a foreign exchange analyst at Mitsubishi UFJ, said in a report that the minutes of the meeting of the Federal Reserve on Wednesday showed that most officials preferred to raise interest rates by a small margin of 25 basis points, but did not provide further measures to boost the dollar, but the dollar is still expected to continue to perform well. With the support of the recent rise in the short-term yield of the United States, the dollar should continue to trade on a more solid basis in the short term, but the Federal Reserve did not provide a new catalyst to trigger further upside overnight. He said that the US dollar weakened moderately in Asian trading hours, especially in relation to commodity related currencies with higher risk.

Institutional analysis: the minutes of the Federal Reserve meeting did not give the reason for the further rise of the US dollar

Interpretation of the news:


Lee Hardman, a foreign exchange analyst at Mitsubishi UFJ, analyzed the minutes of the recent Federal Reserve meeting held on Wednesday and reported that most officials were in favor of raising interest rates by a mere 25 basis points. The report further stated that the officials did not offer any measures to boost the dollar’s performance, however, the dollar is still projected to perform well.

Despite the absence of a catalyst to stimulate an increase in the dollar overnight, the support from the recent rise in the short-term yield of the United States should enable the dollar to trade more steadily in the near future. Lee Hardman indicates that the USD weakened moderately during the Asian trading hours, particularly against the commodity-related currencies associated with higher risks.

The Federal Reserve meeting minutes suggest that officials are taking a cautious approach to monetary policy. The officials are aware of the impact that a sudden increase in interest rates and the stronger dollar could have on economic growth and employment levels. Although the officials are inclined to implement a 25 basis point raise in interest rates, an increase will not aid the dollar’s performance as the officials have not instituted any measures to improve it.

The rise in short-term yields in the US and the possibility of a small hike in interest rates, as suggested by the meeting’s minutes, could have positive effects on the dollar’s performance in the short-term. However, the absence of a trigger to strengthen the dollar will likely cause it to weaken against currencies such as the yen and euro.

In conclusion, the Federal Reserve meeting minutes suggest that although there may be a mild interest rate hike, there may not be any measures to boost the dollar’s performance. As a result, the USD may continue to trade moderately in the near future.

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