Dollar More Attractive After Fed Defies Trump with Rate Rise

Dow Jones09-23 21:26

1326 GMT - The Federal Reserve's decision to raise interest rates last week has made the dollar more attractive, Standard Chartered's Steve Englander says in a note. The rate hike seems to have removed one of the market's major deterrents to buying dollar--the fear that Fed Chair Kevin Warsh would not raise rates in defiance of President Trump, he says. That seems to have unwound some, but not all, of the risk premium built into the dollar since the Treasury announced increased buybacks of long-term debt, he says. "Warsh's endorsement of the U.S. economy's vitality conveyed confidence in both yield sustainability and the attractiveness of direct and portfolio investment in the U.S." The DXY dollar index rises to an eight-week high of 100.967.

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