US Dollar Strengthens Impact The Fed Remains Hawkish

US Dollar Illustration (Photo: Doc. Antara)

JAKARTA - The US dollar strengthened against a basket of other major currencies at the close of trading Friday, September 22 US time. This strengthening occurred because Federal Reserve officials remained hawkish.

The dollar index, which measures the greenback against six other major currencies, increased 0.21 percent to 105.5876 at the end of trading.

"I continue to estimate that further interest rates may be needed to return inflation to 2.0 percent at the right time," Federal Reserve Governor Michelle totaled.

He noted that Fed officials expect inflation to remain above 2.0 percent until at least the end of 2025, according to median forecasts submitted by policymakers in the quarterly economic projections released this week.

Fed Boston president Susan Collins also expressed support on Friday (22/9) to keep interest rates high as the fight against over-high inflation continues. "I estimate interest rates may remain higher, and longer, than previous projections, and further tightening is certainly impossible."

Also on Friday (22/9), the S&P Global manufacturing purchasing manager index (PMI) increased to 48.9 in early September from 47.9 in August, indicating an ongoing contraction in manufacturing sector business activities with a slowing pace.

PMI services fell slightly to 50.2 from 50.5 in the same period, and the combined PMI reached 50.1, down slightly from 50.2 in August.

In Asia, the Central Bank of Japan (BoJ) maintains a very low interest rate on Friday (22/9) as expected.

We have not expected inflation to achieve our target in a stable and sustainable manner. Therefore, we must patiently maintain a very loose monetary policy. Therefore, we will of course change the policy if our target can be achieved. For now, the prospects are for the economy and the price is very high," said BoJ Governor Kazuo Ueda.

At the end of New York trading, the US dollar was purchased at 148.3790 Japanese yen, higher than 147.5180 Japanese yen in the previous session. The Euros fell to $1.0648 from $1.0662 in the previous session, and the British pound fell to $1.2242 from $1.2291.

The US dollar rose to 0.9067 Swiss francs from 0.9040 Swiss francs, and rose to 1.3471 Canadian dollars from 1.3469 Canadian dollars. The US dollar weakened to 11.1118 Swedish krona from 11.1616 Swedish kronas.