U.S. Dollar Rises After Fed Rate Hike

The U.S. dollar strengthened against most major currencies in the European session on Thursday, after the Federal Reserve signaled one additional rate hike this year.

The Federal Reserve raised its key interest rate by 25 basis points, as widely expected, despite the recent weakness of core inflation.

Meanwhile, investor sentiment dampened on a new report that U.S. President Donald Trump is being investigated by special counsel Robert Mueller for possible obstruction of justice and a widening probe into Russia’s role in the U.S. election keeping investors nervous.

Investigators are also looking for any evidence of possible financial crimes among Trump associates, the Washington Post reported.

Market participants awaited Bank of England rate decision, although no changes are expected after Prime Minister Theresa May lost the Conservative parliamentary majority at the June 8 general election.

In the Asian trading today, the greenback held steady against its major rivals.

In the European trading, the U.S. dollar rose to a 2-day high of 1.2702 against the pound, from an early low of 1.2761. The greenback is likely to find resistance around the 1.25 region.

Against the euro and the Swiss franc, the greenback advanced to a 6-day high of 1.1175 and more than a 2-week high of 0.9738 from early lows of 1.1229 and 0.9704, respectively. If the greenback extends its uptrend, it is likely to find resistance around 1.09 against the euro and 0.99 against the franc.

The greenback edged up to 109.81 against the yen, from an early low of 109.27. On the upside, 112.00 is seen as the next resistance level for the greenback.

Looking ahead, the Bank of England will announce its interest rate decision at 7:00 am ET. Economists expect the bank to retain interest rates unchanged at 0.25 percent and asset purchase target at GBP 435 billion.

In the New York session, Canada manufacturing sales data for April and existing home sales data for May, U.S. import price index for May, U.S. weekly…

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