Turmoil in currency movements was witnessed in the market heading into the weekend with the US dollar bouncing off record lows against major currencies.
As expected, the Federal Open Market Committee (FOMC) raised interest rates by 50 basis points on Thursday, bringing the current Federal Reserve (Fed) cash rate to 4.50%.
One of the main things that caught the attention of investors was Chairman Jerome Powell's statement that the Fed will continue to raise interest rates until policymakers are truly confident that inflation will continue to fall.
This caused the US dollar to rise in the Asian session yesterday (Thursday), before slipping slightly after being affected by the disappointing US retail sales data reading in November.
However, the giant currency resumed its strengthening against major currencies towards the end of the New York session.
With the US dollar trading higher, major currencies such as the pound fell lower following the Bank of England's (BOE) policy decision which was viewed as dovish by the market.
The BOE also met market forecasts by raising rates by 50 basis points signaling that the next policy decision will depend on the economic outlook.
In addition, the market also witnessed the decision of the European Central Bank (ECB) which also raised rates by 50 basis points.
However, due to the stronger US dollar, the euro currency failed to show a significant reaction following the decision.
On the other hand, the Aussie dollar slipped lower after dismal Chinese retail sales data saw it fail to capitalize on a positive Australian jobs report with the unemployment rate unchanged at 3.4% in November.
The same fate befell the kiwi dollar which was trading dismally despite a reading of New Zealand's gross domestic product (GDP) data showing a strong expansion in the third quarter of 6.4% year-on-year.
