Hawkish Fed Lifts Dollar

The US Dollar earlier saw positive momentum against its rivals during Asian trade on Friday. That came on the heels of the the Federal Reserve Bank's reaffirmation of its commitment to raise interest rates in the near term. Though the Fed did leave rates at their current levels, the language suggested that a rate hike could come as soon as next month. With the mid-term elections now out of the way and with an outcome largely predicted, analysts say that demand for safe haven currencies is likely to continue to fade.

As reported at 10:37 am (JST) in Tokyo, the EUR/USD was trading at $1.1356, down 0.08%; the pair has ranged from a low of $1.13537 to a high of $1.13690. The GBP/USD was trading lower at $1,3056, down 0.07% and just off the session low of $1.3052 while the high was recorded at $1.3070.

USD/JPY Helped by Policy Divergence

Against the Japanese Yen, the greenback has appreciated 2.4% within the last two weeks, largely a result of the monetary policy divergence between the Bank of Japan and the Federal Reserve. According to the BOJ, the economic situation in Japan does not yet warrant their reining in of the Quantitative Easing policy it began several years ago. Presently, Japan's inflation rate remains stubbornly below the central bank's 2% target while economic growth and productive have been relatively stagnant. The USD/JPY pair was trading lower at 113.884 Yen, down 0.135%.

Barbara Zigah is a freelance journalist living in Ghana, who specializes in Forex-related content; her online work has appeared in the IB Times, NASDAQ, Benzinga, and Seeking Alpha.