The dollar strengthened yesterday after Fed Vice Chair Clarida appeared more upbeat with regards to future rate increases than he did around 10 days ago, while remarks by White House Economic Advisor Larry Kudlow boosted the broader market sentiment. Today, focus is likely to turn to Fed Chair Powell’s speech.
Clarida’s Remarks Boost USD, Focus Turns to Powell’s Speech
The dollar traded higher against most of the other G10 currencies on Tuesday. It gained the most against GBP, CAD and EUR, while it lost ground only versus NZD. It traded virtually unchanged against AUD. The drivers behind the greenback’s strength may have been hawkish remarks by Fed Vice Chairman Richard Clarida, as well as a risk-off mood throughout most of the day.
Kicking off with Clarida, the Fed’s Vice Chair noted that US economic fundamentals are robust, and that US GDP growth is strong. Most importantly, he said that he would back more hikes than expected if inflation surprises to the upside. The dollar came under selling interest around 10 days ago, following comments from several FOMC policymakers, including Clarida himself, which leaned to
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