The Dollar at a 9-Month High After The Release of The Minutes of the US Federal Reserve Meeting

The dollar rose to a 9-month high on Thursday, as global markets fell after the minutes of the latest US Federal Reserve meeting revealed that policymakers expect to reduce the stimulus related to the Corona pandemic period before the end of the year.

The dollar index, which measures the performance of the US currency against six competing currencies, extended its gains in early trading in London, rising 0.3% to its highest level since November 5, 2020, at 93.434.

According to the minutes of the July meeting, US central bank officials are widely expected to reduce their monthly bond purchases later this year, but there has been some disagreement over other key issues including the start date and pace of bond purchases and whether it is inflation, unemployment or the coronavirus. They pose a greater risk to the recovery of the economy.

The minutes pushed the main Wall Street index down more than 1 percent and led many currencies to multi-week lows against the safe-haven dollar. European markets fell at the open.

The euro fell to its lowest level at 1.16655 dollars for the first time since the fourth of November, while the dollar rose to its highest level at 110.225 against the Japanese yen.

The Canadian dollar also hit a four-week low of $1.2699.

Reducing bond purchases is positive for the US dollar as it is expected to raise government bond yields, making holding dollar-denominated assets more attractive to investors.