2021.06.1707:26:00UTC+00U.S. Dollar Trades Higher As Fed Signals Early Rate Hikes

The U.S. dollar traded higher against its major counterparts in the Asian session on Thursday, after the U.S. Federal Reserve pushed forward its projections for the interest rate hikes and indicated that policymakers had started discussions about scaling back the bond purchase program amid receding risks from coronavirus.

The Fed's projections showed two quarter-point interest rate hikes for 2023, versus none in the March forecasts.

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

The central bank raised its projections for inflation and economic growth and took initial steps to wind down the bond purchase program.

In his post-meeting press conference, Fed Chair Jerome Powell said 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.

U.S. treasury yields rose, with the benchmark 10-year yield touching 1.5890 percent.

The greenback climbed to its highest since April 1 against the yen, at 110.82. Against the pound, the greenback rose to a 1-1/2-month high of 1.3971. The greenback had ended Wednesday's deals at 110.71 against the yen and 1.3981 against the pound.

The greenback moved up to a 1-1/2-month high of 0.9107 against the franc and near a 2-month high of 1.1973 against the euro, compared to yesterday's closing values of 0.9086 and 1.1995, respectively. If the greenback rises further, 0.92 and 1.18 are likely seen as its next resistance levels against the franc and the euro, respectively.

In contrast, the greenback pulled back to 1.2262 against the loonie and 0.7645 against the aussie, from its early 1-1/2-month high of 1.2292 and more than a 2-month high of 0.7597, respectively. The greenback is likely to challenge support around 1.20 against the loonie and 0.78 against the aussie.

The greenback reversed from its early high of 0.7047 against the kiwi and was worth 0.7102. The next likely support for the greenback is seen around the 0.73 level.

Looking ahead, the Swiss National Bank's monetary policy announcement will be out at 3:30 am ET. Economists widely expect the central bank to maintain policy rate at -0.75 percent.

Eurozone final CPI for May and construction output for April are set for release in the European session.

U.S. weekly jobless claims for the week ended June 12 and leading index for May will be published in the New York session.