The U.S. dollar extended its gains on Wednesday, after the Federal Reserve raised its target interest rate by three-quarters of a percentage point to stem a disruptive surge in inflation.
The U.S. Dollar Currency Index, which tracks the greenback against six major currencies, was up 0.35% at 105.66.
The US Federal Reserve on June 15 announced a three-quarter of a percentage point or a 75 bps hike in key lending rates, in what is being seen as a move to curb the spiralling inflation.The US central bank, while announcing the rate hike, said it is "strongly committed" to returning inflation to two percent. It projected a slowing down of the economy in the months to come, and a likely increase in the rate of unemployment.
The 75 bps rate hike, as announced by the Fed, is biggest since 1994, and was delivered after recent data showed little progress in its inflation battle.
While no policymaker projected an outright recession, the range of economic growth forecasts edged toward zero in 2023 and the federal funds rate was seen falling in 2024.