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Strong US Dollar Posts 5-Week High, Markets Price in a 75 bps Fed Rate Hike for June

While precious metals, stocks, and cryptocurrencies saw a significant downturn this week, the U.S. dollar tapped a 20-year high against the Japanese yen and a number of other currencies. The greenback has seen five weeks of consecutive gains following the Federal Reserve’s 50 basis point rate hike on Wednesday.

That leaves a resilient USD vs EUR and yen very much the path of least resistance. A softer wages print should help to temporarily take the edge off but this will be short-lived until evidence of a peak/moderation in CPI emerges.

Demand for labour in the U.S. remains very strong and core services inflation is rising steadily. The April non-farm payroll and employment reports — [will] carry a lot of significance.

What do you think about the strong dollar and the chance the Fed will increase the benchmark interest rate by 75 bps? Let us know what you think about this subject in the comments section below.

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