Fed Hike Boosts Dollar, Slows Commodity Prices

The US Federal Reserve raised interest rates by a quarter point overnight, its first hike in more than three years. The decision was unanimous but tilted to the hawkish side.

Investors bet that the Fed is getting ahead of inflation, calming a global bond selloff and sending long-term yields soaring. The move proved a headwind for commodities, with oil prices giving back ground as the US dollar surged to a seven-week high against its major peers.

The focus now shifts to the Bank of England, which is widely expected to leave interest rates steady later in the day but may hint at a potential hike due to high energy prices. The Bank of Japan is all but certain to lift interest rates on Friday.