US Dollar Weakens After Fed Interest Rate Hike

The US dollar weakened against major world currencies after the Federal Reserve (The Fed) raised interest rates. Bloomberg data shows that in transactions on March 15, 2017, local time, the US dollar index against six major currencies (DXY) closed down 0.94 percent to 100.74 from the previous day's close. In Asian markets, the US dollar index further weakened to 100.32.

Market participants had previously anticipated the US central bank's interest rate hike. Therefore, after the Fed's announcement, the US dollar weakened as the 25 basis point (bps) increase to 1 percent was in line with expectations.

This weakening of the US dollar was met with a positive response from regional market participants. In Asian market transactions, regional currencies tended to strengthen against the US dollar. As of 13:56 WIB (Western Indonesian Time), the Indonesian Rupiah appreciated 0.17 percent to Rp 13,341 per US dollar, the Thai Baht strengthened 0.13 percent to 35.019, the Philippine Peso rose 0.26 percent to 50.202 per US dollar. Similarly, the Japanese Yen strengthened 0.11 percent to 113.26 per US dollar, the Chinese Yuan appreciated 0.34 percent to 6.8916, and the Malaysian Ringgit also strengthened 0.26 percent to 4.4373. The South Korean Won even strengthened by more than 1 percent to 1,132.06 per US dollar.