The US dollar gained, hitting multi-week highs against other major currencies on Thursday, as Federal Reserve plans to hike interest rate beginning in March.
Overnight the Fed left its policy rate unchanged but Federal Reserve chair Jerome Powell foreshadowed a sustained battle to tame inflation.
He told reporters there was “quite a bit of room to raise interest rates without threatening the labour market” and said the Fed was of a mind to begin lifting rates in March.
The dollar leapt 0.7 percent against the yen in the wake of the Fed’s decision and Powell’s remarks, its steepest daily jump in more than two months as the prospect of imminent hikes spooked stock markets and drove bond yields higher.
The yen inched a fraction lower to 114.74 per dollar on Thursday. The euro was sold to a six-week low of $1.2301 and the Australian dollar fell about 0.4 percent to a seven-week trough of $0.7076.
“While communication from Fed…