Dollar stands tall as Fed doves talk tough

The dollar clung on in choppy trade on Wednesday, after its biggest surge for weeks as Federal Reserve officials talked up the potential for further aggressive interest rate hikes, Reuters reported.

The U.S. dollar index =USD, which gauges the currency against six major peers, wobbled about 0.3% lower by the Asian afternoon to 106.120, amid a hint of relief that House Speaker Nancy Pelosi’s visit to Taiwan brought few surprises.

The euro EUR=EBS inched 0.2% higher to $1.1085, though it remains under pressure, while the yen JPY=EBS clawed back a little of its overnight drop at rose 0.3% to 132.71 per dollar.

Benchmark 10-year Treasury yields US10YT=RR, were steady on Wednesday after leaping nearly 14 basis points overnight.

Sterling GBP=D3 edged 0.2% higher to $1.2180, while the Antipodeans were pinned near Tuesday’s lows and seem to be taking a breather from a month-long rally.

The Australian dollar AUD=D3 slumped on Tuesday after the central bank opened the door to a slowdown or pause in the pace of future hikes. It was last steady at $0.6930.

The New Zealand dollar NZD=D3 slipped after a surprise rise in unemployment also weighed on hike expectations. It was last at $.06255.