Dollar finds buyers as Fed flags hikes - SABC News - Breaking news, special reports, world, business, sport coverage of all South African current events. Africa's news leader.

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The dollar was perched near a five-week high on Thursday, bolstered after Federal Reserve chair Jerome Powell primed investors for US interest rate hikes beginning in March.

Overnight the Fed left policy unchanged but Powell foreshadowed a sustained battle to tame inflation.

The dollar leapt 0.7% against the yen in the wake of the Fed’s decision and Powell’s remarks, its steepest daily jump in more than two months as the prospect of imminent hikes spooked stock markets and drove bond yields higher.The euro was also sold and fell about 0.5% overnight to a five-week low of $1.1235, holding at that level in Asia.

“While communication from Fed members in the lead-up to this meeting meant that the pivot should not have been a surprise, risk appetite shrivelled as Powell’s press conference progressed and the extent of the Fed’s commitment to act in the face of significant inflation pressure became clear,” said ANZ analysts.

Sterling is hovering at $1.3469 as investors await a Bank of England meeting next week and have an eye on the political turmoil enveloping Prime Minister Boris Johnson, who is under pressure after attending parties during lockdowns.

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