The US Dollar edged higher as investors pin their collective hopes on another rate increase from the Federal Reserve. Yesterday, the Fed hiked rates for the second time this year and hinted at curtailing quantitative easing to reduce the current $4.2 trillion portfolio in Treasury bonds. Analysts and investors had had mixed expectations ahead of the Fed, with some expecting a more dovish outlook given the recent weaker economic data, but long term the Fed’s outlook is well supported and that is providing support for the greenback.
As reported at 10:38 am (BST) in London, the GBP/USD was trading at $1.27, down 0.36%; the pair had earlier hit a session trough of $1.26908 while the peak was at $1.27620. The EUR/USD was down 0.42% to trade at $1.1169, close to the session low of $1.11669. The USD/JPY was up 0.13% to trade at 109.771 Yen, off the session peak of 109.813 Yen.
Dollar Trade Wary of Trump Probe
Despite today’s support, US Dollar traders are still somewhat wary of the latest turmoil surrounding President Donald Trump, specifically news that the special investigator Robert Mueller will be looking into an obstruction of justice charge. The President’s firing of the FBI Director, James Comey, was seen by many in Washington as an effort to hinder the FBI’s investigation into possible collusion with Russia during the 2016 presidential election.