The dollar strengthened against a basket of currencies yesterday due to increase expectations of aggressive monetary policy tightening from the Federal Reserve.
Speaking yesterday, Federal Reserve Governor Lael Brainard said that interest rates should be hiked, and the Fed’s balance sheet reduced rapidly. As a dovish member of the Fed, these comments caused US bond yields to rise and the dollar to follow suit.
Minutes from the latest FOMC meeting will be released later today, providing further clarity on the Fed’s thinking surrounding monetary policy.
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