Category Archives: the fed

Dollar Gains and Hawkish Fed





Dollar Gains

Dollar Gains and the Hawkish Fed

Greenback boosts shortly after the cost of living information indicate a much more hawkish Fed.

The cost of living information suggested an increased likelihood of a December step from the United States central bank and also a quicker pace of rate of interest build up next year, analysts stated.

U.S. Labor Department and Consumer Price Index

The United States Labor Department pointed out its own Consumer Price Index increased 0.2 percent last month. During the 12 months throughout August, the CPI increased 1.1 percent. The figures surpass calculations of economists surveyed by Reuters.

Traders’ expectations of a percentage increase coming from the Fed in its meeting next weeks time went up somewhat to 15 percent off 12 percent on Thursday, according to CME Group’s FedWatch program, though expectations for December climbed to almost 52 percentage points from barely over 47 percent.

“It’s lining up nicely for the Fed to tie a bow on this year and give us that 25 basis point hike just before the holidays,” said Stephen Casey, senior forex trader with Cambridge Global Payments located in New York.

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The dollar happened to be last up only 0.25 percent versus the Yen at 102.35 Yen JPY=before the BOJ’s Sept. 20-21 policies business meeting.

The US dollar index remained on course so as to publish its very best l week period inside three, along with an increase of roughly 0.8 percent. However, the greenback was actually positioned for its repeated out-and-out weekly decline versus the Yen, of around 0.3 percent.

The dollar index, that measures the dollar against a basket related to six major currencies, went up 0.8 percent to 96.063. DXY. The Euro EUR= reached a 10-day mark down in contrast to the dollar of $1.1149, while the dollar hit a two-week high opposing the Swiss franc CHF= of 0.9817 Franc.

Sterling reached a one-month mark down opposed to the US dollar of $1.3001 GBP. This happened soon after Bloomberg reported that Chancellor of the Exchequer Philip Hammond was “ready to accept” that Britain may have to discontinue being a member in regard to the European Union’s single market, citing unrevealed representatives. The money was last down 1.7 percent around $1.3015.

Hammond said in mid-July in that Britain would leave the single market due to its decision to depart the EU. Britain elected to exit the EU on June 23.

“It’s just a sign that Brexit comes at a cost,” said Vassili Serebriakov, Foreign Exchange strategist at Credit Agricole in New York.

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The Federal Reserve and Interest Rates





Federal Reserve

Federal Reserve and Interest Rate Hike

The Federal Reserve is getting closer to increasing interest rates once again, the chief of the United States central bank as well as other policymakers stated on Friday in comments that placed the door open for a rate boost as early as next month.

The Stock Market Reaction

The Markets remained doubtful of the Fed’s rate increase projections. In the past there was a recognized wide gap between what it has signified and essentially delivered.

The Fed officials’ comments forced the dollar.DXY higher against a basket of currencies. U.S. stock prices see-sawed, finishing the trading session basically lower, while prices of U.S. Treasuries were largely weaker.

More from Janet Yellen

Fed Chair Janet Yellen advised an international monetary policy conference that the case for a rate increase had grown stronger. Fed Vice Chair Stanley Fischer advised a move could possibly come at the central bank’s September policy meeting. That is in case the economy was coming along.

U.S. government data earlier on Friday showed the overall economy growing only sluggishly in the 2nd quarter, Yellen said a good deal of new jobs were being generated and economic expansion would likely carry on at a moderate pace.

” I believe the case for an increase in the federal funds rate has strengthened in recent months,” Yellen pointed out in a speech at the Fed’s yearly monetary policy meeting in Jackson Hole, Wyoming.

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Yellen pointed out the Fed pretty much believes it is close to fulfilling its objectives of maximum employment and steady prices. She further detailed consumer spending as “solid” while keeping in mind business investment was feeble and exports had been hurt by a strong AMERICAN dollar.

She did not provide advice on exactly what the central bank needs to find before increasing rates. Following her comments, investors continued to bet there were approximately even odds of an increase at the Fed’s December policy meeting.

” She’s just kept the door open for a hike sooner rather than later,” said Subadra Rajappa, an interest rate strategist at Societe Generale in Washington.
During an interview with CNBC after Yellen’s speech, Fischer, the central bank’s No. 2 official, stated the Fed chief’s remarks were a sign of just how close policymakers could be to raising rates if data kept suggesting a good economic outlook.

Asked whether folks should “be on the edge of our seat” regarding a rate jump in September and for more than just one policy tightening before the end of the year, Fischer said, “I think what the Chair said today was consistent with answering yes to both of your questions.”

Atlanta Fed President Dennis Lockhart likewise said on Friday that a pair of rate hikes were likely possible this year, and Cleveland Fed President Loretta Mester argued for an increase in the near future to keep away from falling behind the curve on rising cost of living.

For more on this, see Rueters.

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Currency trading and Stock trading – the Yellen effect

stock exchange

Events of the last several months overseas as well as here in the U.S., are having an adverse effect on markets….

But the focus was on Yellen, who was due to speak before the Economic Club of New York at 1530 GMT. Weaker-than-expected U.S. consumer spending data on Monday prompted analysts to suggest the U.S. central bank would be cautious about raising rates this year. Fed policymakers earlier this month projected two rises in 2016, with some saying the first could come next month.

http://www.reuters.com/article/us-global-markets-idUSKCN0WU00R


The FEDs remarks and how they affect the U.S. Dollar

weakened dollar

 

You know, when the FED comes out and makes a calculated remark, something is going to change, sometimes for the good…..or not!

US stocks clawed back their opening losses into the NY close on the back of comments from Fed vice chair Fisher, who suggested that the Fed does not have a pre-determined path for rates. The comment also weighed on the dollar into the close. It was no great surprise to see the RBA keeping rate steady,

http://www.forexcrunch.com/dollar-weakens-after-fishers-comments/


Forex – Fed rate hike view

fed interest hike

Several weeks ago, there was not any indication of a rate hike, now…..

© Reuters. Dollar close to 7-month peaks on Fed rate lift off expectetions

Investing.com – The dollar was trading close to seven-month highs against the other major currencies on Tuesday amid heightened expectations that the Federal Reserve will raise U.S. interest rates at its December meeting.

http://www.allwebsolutions.net/business/finance/investment-research/day-trading/forex/forex-dollar-close-to-7-month-peaks-on-fed-rate-hike-view/