Dollar Continues to Rise After Fed Decision and Powell’s Statements

The U.S. dollar has been climbing since the announcement of the Federal Reserve’s decision to maintain interest rates for the fifth consecutive time within the range of 4.25% – 4.50%, keeping the U.S. currency among high-yield assets.

The dollar gained its current upward momentum from the uncertainty reflected in the Federal Reserve’s statement following the conclusion of its July meeting, as the central bank expressed less optimism about the future of the U.S. economy in the coming period.

In addition to the Fed’s reduced optimism at the July meeting, there was another notable difference between this month’s interest rate statement and the one issued in June. Two members of the Federal Open Market Committee diverged from the majority, advocating for the start of quantitative easing.

This rare occurrence served as evidence of an emerging division within the Federal Committee regarding the future path of monetary policy, further fueling the U.S. dollar’s upward momentum.

Jerome Powell, Chair of the Federal Reserve Board of Governors, confirmed that the central bank has not made any decisions regarding changes to the interest rate at the upcoming September meeting.