US Dollar Index awaits further cues
The US Dollar Index (UUP), which measures the strength of the US dollar against a basket of major currencies, was trading on a lower note on June 15, 2016. The poor performance of the US Dollar Index was not surprising as the US Federal Reserve maintained a dovish stance during the FOMC (Federal Open Market Committee) meeting and kept rates unchanged. The markets were not pricing in a rate hike prior to the Fed’s policy release, with the US Dollar Index hovering around the 94.6 mark.
Asian currencies continue to trade weaker with the exception of the yen
European currencies’ reaction to the rate announcement
European currencies (FEZ), which form a major part of the US Dollar Index, reversed their trajectory to trade on a positive note on June 15. The gains were led by the euro and the pound as investors offset their short positions in these currencies. The German DAX (EWG) rose by 0.92%, while the FTSE 100 (EWU) rose by 0.73%. The biggest gainer among European indexes was the Swedish OMX Stockholm 30 Index, which rose by 2.4% following the Fed’s policy release.