Dollar Strengthens As Fed Hints At September Interest-rate Hike

The dollar strengthened against its main rivals Wednesday after the Federal Reserve left the door open for an interest-rate hike later this year. The dollar was up 0.9% on the day, rising to 105.79 yen after the statement, compared with 105.62 ahead of the statement. Currency traders interpreted the statement as hawkish, pushing the dollar higher. The euro turned lower on the day, falling to $1.0975, compared with $1.0999 beforehand. The pound tumbled to $1.3110, compared with $1.3137 before. The Fed voted 9-1 to leave interest rates unchanged, but policy makers appeared receptive to raising interest rates at its September meeting, saying that near-term risks to its economic outlook have diminished. In theory, higher interest rates in the U.S. would cause the dollar to climb by increasing the return on dollar-denominated assets, making them more attractive to investors.