Fed officials’ statements supporting USD, Pound awaits a rate hike

The dollar held onto recent gains against other major currencies on Thursday, as comments from Federal Reserve officials reinforced the US central bank’s determination to tackle the highest inflation rate in decades with massive interest rate hikes.

Meanwhile, the Bank of England is widely expected to raise interest rates by the most since 1995, with the Pound rallying ahead of a much-awaited rate decision at 1100 GMT.

Federal Reserve officials continued their comments resisting the perception that US interest rates are close to peaking, which has supported the dollar.

San Francisco Federal Reserve Bank President Mary Daly and Minneapolis Federal Reserve Bank President Neil Kashkari expressed their intention Wednesday night to curb high inflation.

Fed officials have uniformly indicated that they remain determined to raise interest rates until there is strong evidence that inflation is heading lower towards the Fed’s 2 percent target.

The dollar rose in the latest trading by about 0.2 percent to 134.15 yen, and fell slightly against the euro, as it was traded at 1.0176 dollars.

The dollar index, which measures the greenback’s performance against six major currencies, reached 106.34, consolidating above the lowest level in a month recorded earlier this week. The US currency index rose about 0.4 percent this week, after falling in the past two weeks.

A Reuters poll on Thursday showed that the dollar’s strength has yet to peak.

The poll found that 70 percent of respondents believe the dollar has not yet peaked in this cycle, even after its index reached a two-decade high in July.

The pound rose 0.2% to $1.2172. The Bank of England is widely expected to raise interest rates by 50 basis points to 1.75 percent, the highest level since late 2008.

The Bank of England has not raised its interest rate by half a point since it became independent in 1997.

The Australian dollar rose 0.2 percent to $0.6968, after rising nearly 0.5 percent the previous day.

The cryptocurrency bitcoin rose 0.6 percent to $22,975.