The US dollar continues to trade strong. The US dollar index has risen for the second consecutive week and is retaining its strength. The index fell to a low of 107.59 on Friday and then recovered sharply after the US Federal Reserve Chairman Jerome Powell’s speech at the Jackson Hole symposium. The index has closed at 108.83, up 0.6 per cent for the week.
The Fed Chairman Powell on Friday reiterated that the central bank would continue to raise the interest rates that could cause some pain to the economy. Market was widely expecting Powell to be less hawkish. But the tone of Powell reinstated their aggressive stance to bring down the inflation. That, in turn, took the risky assets such as the equities spiralling down and the greenback up.
The US Federal Reserve’s next policy meeting is on September 21. The outcome of Powell’s speech on Friday has left the doors open for another 75-basis points (bps) hike. If…