Dollar Continues To Ride On Fed's Hawkish Comments

(RTTNews) - The U.S. dollar surged higher on Thursday, scoring gains against most of its major counterparts, as hawkish remarks by the Fed pushed up the demand for the safe-haven currency.

After raising interest rate by 50 basis points on Wednesday, the Fed signaled more rate increases in the coming months, saying inflation is still at elevated levels.

Today, the European Central Bank (ECB), the Bank of England (BoE) and the Swiss National Bank (SNB), all raised their interest rates, and the ECB and SNB signaled further tightening in the coming months.

The ECB has raised interest rates by 50 basis points today, slowing the pace of increases after raising rates by 75 points at the previous two meetings. The bank says it expects to raise rates further as "inflation remains far too high and is projected to stay above the target for too long."

The BoE lifted its benchmark rate for the ninth consecutive meeting on Thursday but moderated the pace of tightening from the previous session's 75 basis point hike amid rising concerns that the UK economy is in recession.

The rate-setting committee of the BoE raised the Bank Rate by 50 basis points to 3.5%, the highest since October 2008.

Switzerland's central bank raised its key interest rate for the third straight meeting and said it cannot rule further tightening in the policy rate, to counter rising inflationary pressures and spread of inflation.

The Swiss National Bank raised its policy rate by 0.5 percentage points to 1%. The outcome of the meeting widely matched expectations.

The dollar index climbed to 104.88, and despite easing to 104.62, was still up by a strong 0.82% over its previous close.

Against the Euro, the dollar firmed to 1.0628 from 1.0682.

The dollar is strong against Pound Sterling at 1.2176, about 2% up from Wednesday's close of 1.2425.

Against the Japanese currency, the dollar strengthened, fetching 137.78 yen a unit, compared with 135.47 yen on Wednesday.

The Aussie weakened against the dollar, with the AUD/USD pair at 0.6701, sliding from 0.6863.

Against Swiss franc, the dollar firmed to CHF 0.9285 from CHF 0.9245. The dollar is stronger against the loonie at C$ 1.3666, rising from C$ 1.3548.