The Federal Reserve tightened the US monetary policy. The Federal Open Market Committee voted for interest rate increase. Thus, the Fed raised interest rates by 0.25% points to 0.75%. The monetary authorities upgraded their economic forecasts. Judging by the minutes, analysts expect the central bank to increase interest rate three times during the next financial year. As a result the US dollar surged to new highs against its major counterparts. On Thursday, the US dollar index rose by more than 1% and hit a fresh all time high of 102.40. Later, the index corrected to 102.30. The US dollar strengthened amid the announcement of president elect Donald Trump plan to cut taxes and increase spending on infrastructure. Analyst Janet Yellen stressed that despite a favorable situation on the labor market, it does not bolster rapid growth of inflation. The US consumer prices are still below the target level.
The US dollar also strengthened as US president elect Donald Trump announced his plan to cut taxes and increase spending on infrastructure. We also should take into account the major counterparts of the US dollar. During the Asian session, the Aussie tried to retrieve its losses against the greenback, but the US dollar still puts downward pressure on the Australian currency. Traders started to buy the Australian dollar after release of the Australian labor market data, which revealed employment growth in November. According to official data, the number of employed increased by 39,100 people in November, which exceeded market expectations. Analysts had forecast a much lower growth rate by 20,000 people. In October, employment rose by 15,200 people. Meanwhile, the unemployment rate in November rose to 5.7%, after growth to 5.6% in October. Analysts had predicted the same reading in November. Mixed economic data will not allow the Australian dollar to go up against the US dollar. Analysts expect growth of the US dollar against all of its counterparts until the end of 2017.