Fundamental Comment

Dollar eases from five-month high after Fed minutes


The Fed's meeting minutes released on Wednesday did not bring any surprises to the markets, but it confirmed some of the points that had been expected before. As a result, we saw the U.S. dollar slide slightly to stop the rally against major currencies.

The Fed's May policy meeting minutes, which saw fixing holding interest rates between 1.50% and 1.75%, showed that members had agreed to continue the gradual raise of interest rates at least once this year, raising the likelihood of a rate hike at the bank's next meeting in June.

In addition, the current growth pace is reassuring to members that it will help inflation reach the central nank's target of 2%, but the members explained that the Bank will allow inflation to exceed the Bank's target for a specified period of time.

The current trade tensions after the opening of file of raising tariffs on US imports has increased the emergence of large-scale risks.

The U.S. dollar hit its highest level against a basket of major currencies since nearly six months at 94.10, according to the dollar index, during yesterday's trading, before falling back again and recording a low at 93.59.

The yield on the 10-year government bonds fell for a second day in a row to hit a low of 2.977% after the minutes showed that there was no need to rush to increase the pace of raising interest rates.

The dollar levels are likely to stabilize near their highest levels, due to weakness in other major currencies as well as current tensions in financial markets as Trump announces his intention to raise tariffs on auto imports, bringing the trade crisis back on track.

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