The US Federal Reserve unanimously increased interest rates by 25 basis points on Thursday, adopting a hawkish stance that highlighted upside inflation risks. This move strengthened the US Dollar, with USD/CAD consolidating gains near the 1.4000 level, according to FX Street. Chairman Kevin Warsh’s comments reinforced the Fed’s cautious outlook, supporting the dollar's advance.
Following the rate hike, EUR/USD traded near 1.1465 with a bearish tone, while Central and Eastern European currencies faced pressure amid the stronger dollar environment, FX Street reported. Meanwhile, the US 10-year Treasury yield eased slightly after the hike, as noted by Investing.com Forex.
For Japanese investors, the Fed's decision underscores the ongoing divergence between US and Japanese monetary policies, impacting FX and equity markets as the yen remains under pressure against the dollar.