Forex - Dollar rallied on Wednesday supported by drop in Oil prices and improved confidence in financial sector
The Dollar rallied to a one-month peak against the Yen and a two-week high against the Euro on Wednesday, supported by a further drop in Oil prices and improved confidence in the US financial sector.
The Dollar also continued to benefit from comments from Philadelphia Federal Reserve President Charles Plosser, who said on Tuesday that the US central bank may have to raise interest rates sooner rather than later to combat inflation. Futures markets are pricing a 68% chance against 52% the week before for the Fed to increase benchmark lending rates in September, to 2.25% from current 2%.
The R serve Bank of New Zealand cut the benchmark interest rate by 25bp to 8% and said it expects to cut rates further on expectations the economy will continue to slow.