Forex – U.S. Dollar Continues to Rise on Fed Rate Hike

© Reuters. The U.S. dollar rallied on Thursday. – The U.S. dollar rose on Thursday after the Federal Reserve increased interest rates, as expected.

The , which measures the greenback’s strength against a basket of six major currencies, surged 0.59% to 94.43 as of 11:26 AM ET (15:26 GMT).

The Fed raised interest rates by a quarter point to 2.25% on Wednesday, its third rate hike this year and its eighth since 2015.

While the rate hike was not a surprise, it helped boost the greenback higher, as the central bank indicated it expected to increase rates for a fourth time in December, with three hikes in 2019 and one in 2020.

The central bank dropped the word “accommodative” to describe its monetary policy stance in its statement, saying the change does not signal any change in the bank’s path toward normalizing monetary policy.

Elsewhere, the dollar rose against the safe-haven yen, with up 0.50% to 113.28.

The euro fell to one-week lows amid concerns that Italy’s new government would have to delay a budget meeting planned for later in the day, following reports of a row ahead of a looming deadline to present the budget.

Investors are also worried that the government will seek to increase next year’s budget deficit, which could put Italy on a collision course with the European Commission and investors who would like to see a deficit cut.

was last at 1.1669 after falling as low as 1.1685 earlier, the lowest level since Sept. 20.

Sterling was also lower, as investors remain skeptical of Brexit negotiations between the UK and the European Union. decreased 0.46% to 1.3104.

The Australian dollar was lower, with down 0.63% to 0.7211, while fell 0.57% to 0.6625 and gained 0.30% to 1.3058.

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