The general index of the US dollar is trading at an increase of about 0.45% in the middle of today’s session, Thursday, March 2nd, at 104.79 levels, after volatile trading since the beginning of the week, and after testing 104.10 levels in the middle of the week’s trading. The US dollar is receiving support today from the market’s high expectations regarding a stronger tightening of the US Federal Reserve in the coming period, after the statements of the US Federal Reserve members, which supported the rise in US bond yields.

The statements of the US Federal Reserve members at the end of trading on Wednesday came in support of tightening monetary policy in a stronger way, as the President of the Federal Reserve in Minneapolis, Neel Kashkari, stated that he is open to the idea of ​​raising interest rates by 25 points or 50 basis points at the next bank meeting in March, while the head of the Federal Bank in Atlanta stressed Rafael Bostick stressed the need to continue raising interest rates above 5% levels to ensure that inflation does not rise again.

Futures expectations using the FEDWatch tool from CME are now seeing an interest rate hike of 50 basis points in the March meeting, by about 30%, compared to less than 20% before these statements at the beginning of the week, while expectations fell to 69% for a rate hike, by 25 basis points.

US Treasury bond yields rose after these statements, as the 10-year yield rose to the highest levels of 4% for the first time since November 2022, while the two-year yield increased by 6 points, at 4.88%, in a sign of stronger tightening from the US Federal Reserve.

On the other hand, the euro is trading at 1.0622 levels against the US dollar, despite the rise in inflation today, affected by the rises in the dollar, as today’s figures put pressure on monetary policy makers in the European Central Bank, and it may extend the rate hikes after March, especially since the markets have raised their expectations for the peak of interest rates. To 4.50%, which means two rate hikes of 50 basis points after the March meeting, expected in May and June.

The Japanese yen continues to decline, and is trading at its lowest levels against the US dollar since December of last year, at 136.80 levels, taking advantage of the easing monetary policy of the Central Bank of Japan, which is the opposite of the Fed’s strict policy.