The dollar is spiking — here’s what’s happening in FX


Good afternoon!

The US dollar is spiking higher against major currencies after the latest Fed minutes, which crossed at 2 p.m. ET.

The minutes suggested the Federal Open Market Committee could raise its benchmark interest rate next month if the economic data warrant it.

The dollar index is stronger by 0.6% at 95.11 as of 2:46 p.m. ET.

As for the rest of the world, here’s the scoreboard:

    The Australian dollar is crashing by 1.3% at 0.7234. Earlier in the morning, Marc Chandler, the global head of currency strategy at Brown Brothers Harriman, wrote in a note to clients: “The Australian dollar is retracing a sufficient part of its recent gains to suggest that the current phase of the US dollar’s recovery is not over. Given that the Aussie topped out a week before the other major currencies, it is reasonable that this is where the US dollar begins recovering first.” The Japanese yen is weaker by 0.7% at 109.93 per dollar following the latest data showed the Japanese economy grew by 0.4% in the first quarter, above economists’ expectations of a 0.1% increase. The euro is weaker by 0.7% at 1.1231 against the dollar. Earlier in the day, data showed consumer prices in the eurozone slumped by 0.2% in April, in-line with forecasts. Prices in the eurozone haven’t posted a monthly gain since December. Stripping out the volatile food and energy components, core CPI was also in line with expectations, up 0.7%.The Russian ruble is down by 1.6% at 65.7913 as oil prices trickle downwards. Brent crude oil is weaker by 0.9% at $48.85 per barrel. Still, the petro-currency has been the best among emerging-markets over the past few months. The South African rand is weaker by 1.8% at 15.8171 after data showed lower-than-expected inflation and retail sales. Retail sales rose by 2.8% year-over-year, while inflation slowed from 6.3% to 6.2% (with food inflation hitting a four-year higher of 11% yoy). This “will probably lead the SARB to leave rates on hold at its meeting tomorrow,” wrote Capital Economics John Ashbourne. “Output data suggest that South Africa narrowly avoided a fall in GDP in Q1.”