Dollar surges as Federal Reserve bullish on rate hike in June

NEW YORK (APP) - The dollar jumped on Wednesday after the minutes to the Federal Reserve's end-April meeting showed the central bank was far more bullish about a possible June rate hike than markets had initially expected.

Markets had dismissed a June rate hike as a 5 percent possibility just last week, but rate derivatives indicated that chance jumped to about 34 percent after the minutes were released.

Short-term Treasury bond yields surged and the dollar jumped 0.8 percent to $1.1218 against the euro, and 1.0 percent to 110.20 yen.

"The release was significantly more hawkish than many had expected, notably stressing that a June interest rate hike would be likely if economic growth data continued to progress as expected," James Chen of Forex.com said.

The British pound meanwhile continued its climb, rising 1.1 percent on the dollar before the Fed report and then giving back only a little to end the day up 0.9 percent at $1.4599.