Currency News: Dollar Bullish After Fed Meeting, Euro Falters
Currency News
The US dollar remained stronger against the yen and the euro on Monday following the comments from Federal Reserve Chair Janet Yellen last week. During the Fed meeting on Friday, it was revealed that inflation for core consumer prices rose 1.8% in the month of April, well ahead of expectations. Analysts took this as a sign that the Fed was likely to raise interest rates in 2015, something that Yellen supported in her comments after the meeting.
The US dollar reached one-month highs against a basket of other major currencies on Tuesday, as the dollar continues to trade up while concerns persist about other currencies. The dollar reached a two-month high of 121.79 against the yen, coming close to its eight-year peak of 122.04 against the currency. The dollar had its strongest weekly gain against the yen in six months, while it also extended gains against the euro, the British pound, and the Canadian dollar.
The recent rally of the euro against the dollar reversed course after the Fed meeting and as concerns surrounding Greece and Spain deepened. The currency pair reached three-week lows, as the EUR/USD struggled to maintain support at the 1.10 level. Besides the positive factors affecting the dollar, the euro is hurting because of news from Greece that it will be unable to pay back its IMF loan in June. Meanwhile in Spain, voters delivered a blow to the ruling Popular Party, as voters are fed up with austerity measures and a struggling economy.
