US Dollar Gains Momentum, but Experts Warn of Short-Term Reversal
The US Dollar has maintained its momentum after the Federal Reserve's recent rate hike, but experts warn that this trend will not last long.
The EUR/USD pair closed the week below 1.1500, near a multi-week low of 1.1454, as the US Dollar rallied following the Fed's monetary policy announcement.
The Fed hiked the benchmark rate by 25 basis points to a 3.75%, 4.00% range, citing inflation above its goal since March 2021.
Despite concerns about President Trump's tariffs weighing on price pressures, the global energy supply crisis created by the Iran-Israel conflict has taken center stage, with oil prices skyrocketing due to scarce supply and interrupted sea traffic through the Strait of Hormuz.
Market players were initially uncertain about the Fed's decision, given Chair Kevin Warsh's refusal to provide forward guidance and President Trump's criticism of the rate hike, but the Fed's hawkish message has since been taken as a signal for further tightening.