US Dollar Rises after Fed Hints at a Sooner-than-expected Interest Rate Hike

Edited by Vani Rao

Euro and GBP fell to their two- and five-week lows, respectively, against the USD

The US dollar rose to its two-week high against the Euro on March 21, 2014, after Fed Chairperson Janet Yellen indicated that interest rates could rise six months after the Fed concluded its bond-buying program. The Fed also announced that it will trim its monthly asset purchases by $10 billion, to $55 billion a month.

Meanwhile, in a separate report, the US Department of Labor reported better-than-expected US jobless claims data, which further strengthened the US dollar. According to the report, initial jobless benefits increased by 5,000 to 320,000. Analysts were anticipating jobless claims to rise by 10,000.

The EUR/USD pair finally settled at 1.3779, down 0.28%, after fluctuating between 1.3750 and 1.3845, on Thursday, March 20, 2014, as shown in the graph below.

At the time of last reporting, the EUR/USD pair was trading at 1.3783, up 0.03%.
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Markets experts will be following the currency movements between the two economies on Friday, March 21, when the Eurozone is scheduled to release data on its current account.


The GBP fell to its five-week low versus the US dollar on Thursday, March 21, 2014, after the US dollar carried forward its gains from Wednesday’s trading session following developments of the Fed’s general meeting and the upbeat US employment report.

In a parallel development, reports from the Philadelphia region indicate that manufacturing activity grew at a faster-than-expected rate in March. However, as per reports by the National Association of Realtors, existing homes sales declined in February, triggered by escalating prices and inclement weather.

The GBP/USD pair ended Thursday’s session 0.16% lower at 1.6504, after trading between 1.6568 and 1.6480, as shown in the graph below.

At the time of final reporting, the pair was trading at 1.6510, up 0.02%.

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Analysts will be looking forward to a change in the relative price of the GBP/USD post the announcement of data on public sector net borrowing by the UK, on Friday, March 21.


The US dollar remained steady against the yen on Thursday, March 20, 2014. The USD/JPY pair traded close to its four-day high of 102.67, before closing Thursday’s trading session at 102.39, up 0.05%. The USD/JPY pair traded at an intra-day range of 102.22 and 102.55, as shown in the graph below.

currency 3

The US dollar has managed to stay higher against the Japanese yen in the previous trading sessions. The Japanese market will remain shut and no data is slated to be released on Friday, March 21. Analysts will be monitoring the currency fluctuation between the pair in the coming week.


The US dollar rose to its two-week high against the Swiss franc on Thursday, March 20, 2014. The USD/CHF pair gained 0.30% to close the session at 0.8834. Like other major currencies, the Swiss franc dipped against the dollar after the release of the Federal Reserve’s economic outlook. Meanwhile, the Swiss National Bank decided to leave its interest rates unchanged on Thursday.

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