U.S. Dollar Continues To Grind Higher On Fed Rate Hike Bets
August 29 2016 - 1:56AM
RTTF2
The U.S. dollar strengthened against the other major currencies
in the early European session on Monday, extending its gains from
last Friday after Federal Reserve Chair Janet Yellen and Fed Vice
Chair Stanley Fischer signaled the world's largest economy looks
healthy enough to take on another increase in interest rates as
soon as September.
The Federal Open Market Committee "continues to anticipate that
gradual increases in the federal funds rate will be appropriate
over time to achieve and sustain employment and inflation near our
statutory objectives," Yellen said in a symposium at Jackson Hole,
Wyoming.
Comments from Fischer that an interest-rate increase is possible
in September and it's possible the FOMC could raise interest rates
twice this year also made investors jittery.
The U.S. jobs report for August will be released this week, with
investors waiting to see if the data confirms the recent Fed
rhetoric of a strong economy.
Market participants also await the results of global
manufacturing surveys and the outcome of the upcoming Group of 20
Summit in Hangzhou, China, for further direction.
Meanwhile, the European stock markets are lower in the wake of
hawkish comments from Federal Reserve officials.
In Asian trading, the U.S. dollar held steady against its major
rivals.
In the European trading, the U.S. dollar rose to a 2-week high
of 1.1172 against the euro and a 1-week high of 1.3088 against the
pound, from early lows of 1.1208 and 1.3138, respectively. If the
greenback extends its uptrend, it is likely to find resistance
around 1.09 against the euro and 1.27 against the pound.
Against the yen and the Swiss franc, the greenback advanced to
near 3-week highs of 102.39 and 0.9794 from early lows of 101.83
and 0.9765, respectively. The greenback may test resistance around
107.00 against the yen and 1.00 against the franc.
Looking ahead, U.S. personal income and spending data for July
is due to be released in the New York session.
The U.K. markets are closed in observance of the Summer Bank
holiday.
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