US dollar index hits 13-year highs after Fed rises rates

The US dollar rose across the board hitting fresh multi-month highs against the yen after the FOMC decided, unanimously, to raise the target rate of the Fed Funds by 25bp as expected. The US central bank signaled a faster pace of hikes in 2017 (three times according to the “dot plot”, up from the previous two). 

A more hawkish that expected statement boosted the greenback in the market. The US Dollar index, which gauges the US dollar against its main competitors, rose from 100.85 and climbed above 102.05 (previous high), hitting a fresh 13-year high. 

JPY down, stocks little change

The DXY was holding around the highs, at the 102.10 zone, as EUR/USD was headed toward a test of 1.0500. The most affected currency after the decision was the Japanese yen, that tumbled as US yield soared. USD/JPY so fa has risen 150 pips since the decision and reached levels on top of 117.00 for the first time since January. 

Main Wall Street stock indexes retreated modestly following Fed’s decision. The Dow Jones was falling 0.18%, at 19,870 while the Nasdaq was unchanged for the day. In the bond market, the 10-year yield rose to 2.549%, the highest since September 2014. Gold tumbled below $1150, to 11-month lows.