2021.06.1720:31:00UTC+00Dollar Gains Against Major Rivals As Fed Projects Early Rate Hikes

The U.S. dollar gained against its major rivals on Thursday, riding on U.S. Federal Reserve's projections that interest rates might see two quarter-point hikes in 2023.

Seven officials penciled in a first hike as early as 2022.

The Fed raised its projections for inflation and economic growth. Fed Chair Jerome Powell said in his post-meeting press conference that the members have started discussions about scaling back the bond purchase program given higher inflation and faster economic growth.

He said that reaching the standard of "substantial further progress" is still "a ways off" and stressed the central bank would provide "advance notice" before making any changes to its asset purchases.

In other economic news from the U.S., the Labor Department said initial jobless claims rose to 412,000 in the week ended June 12th, an increase of 37,000 from the previous week's revised level of 375,000. Economists had expected jobless claims to edge down to 359,000 from the 376,000 originally reported for the previous week.

A separate report from the Federal Reserve Bank of Philadelphia showed Philadelphia-area manufacturing activity expanded at a slightly slower rate in the month of June.

Meanwhile, the Conference Board released a separate report showing another significant increase by its index of leading U.S. economic indicators.

The dollar recorded its highest levels ranging from 1to 2 months against its major counterparts today.

The dollar index, which rose to 92.01 about an hour past noon, was last seen hovering around 91.95, up 0.9% from the previous close.

Against the Euro, the dollar firmed to 1.1904, gaining nearly 0.8%. Final data from Eurostat showed that Eurozone consumer price inflation surpassed the central bank's target for the first time in more than two years in May.

The Pound Sterling weakened against the dollar, fetching $1.3921 a unit, nearly 0.5% less than Wednesday's close.

Against the Yen, the dollar dropped to 110.28, giving up nearly 0.4%.

The dollar strengthened to $0.7548 against the Aussie, from $0.7610.

The Swiss franc slid to CHF 0.9178 against the dollar, weakening from CHF 0.9087. The Swiss National Bank maintained its expansionary monetary policy to stabilize economic activity and price pressures.

Policymakers of the SNB retained the policy rate and interest on sight deposits at the bank at -0.75%.

Against the Loonie, the dollar rose sharply, fetching C$ 1.2359 a unit, up from C$ 1.2277 Wednesday evening, as crude oil prices declined sharply.