Chairman of the Federal Reserve, Janet Yellen, last night (4/11) reaffirmed that the Fed rate hikes may still be made in December 2015 when the data that will come to support the decision. His view supports the strengthening of the US dollar-the currency against another currency.
Yellen said, "Currently there are no decisions made about (the increase in the fed rate) and, terms upon which (the decision) was propped up against is the assessment (FOMC) at the time (increase) was (considered). Assessment will be compiled from information of all the data we collect between now and the time (FOMC December) it. "
Yellen also said that he and his team expect the US economy will grow in pace that can generate further improvements in the labor market, and return inflation to the target of two per cent of them. Further, if the information forward to support these expectations, the Fed rate hike in December is "live possibility" (most active).
Yellen's views are echoed by his deputy, Stanley Fischer, in his speech at the annual dinner of the National Economists Club a few hours later. Fischer expressed his belief that diminishing unemployment will push inflation higher, and thus the inflation target of two per cent was not so far out of reach. According to him, the target will be reached once oil prices stop falling and the strengthening dollar restrained.
After Yellen's testimony in front of the Financial Services Committee of the US Parliament, Fed Funds Futures indicate a 60 percent chance of the Fed raising interest rates at the FOMC meeting next month. Bloomberg US Dollar Index weighting USD compared to a group of other currencies also rocketed to 97 923, its highest level since July 2015.
Correspondingly, the EUR / USD collapsed to 1.0844, the lowest level since August. Market participants seem to reconcile that statement with a speech Yellen dovish ECB Mario Draghi on the same day, and concluded that the contrast between the two central bank policy is a compelling reason to busy to remove Euro. GBP / USD also fell to 1.5361, while USD / JPY reached the 121.71 level which previously had touched on 24 October.
Yellen said, "Currently there are no decisions made about (the increase in the fed rate) and, terms upon which (the decision) was propped up against is the assessment (FOMC) at the time (increase) was (considered). Assessment will be compiled from information of all the data we collect between now and the time (FOMC December) it. "
Yellen also said that he and his team expect the US economy will grow in pace that can generate further improvements in the labor market, and return inflation to the target of two per cent of them. Further, if the information forward to support these expectations, the Fed rate hike in December is "live possibility" (most active).
Yellen's views are echoed by his deputy, Stanley Fischer, in his speech at the annual dinner of the National Economists Club a few hours later. Fischer expressed his belief that diminishing unemployment will push inflation higher, and thus the inflation target of two per cent was not so far out of reach. According to him, the target will be reached once oil prices stop falling and the strengthening dollar restrained.
After Yellen's testimony in front of the Financial Services Committee of the US Parliament, Fed Funds Futures indicate a 60 percent chance of the Fed raising interest rates at the FOMC meeting next month. Bloomberg US Dollar Index weighting USD compared to a group of other currencies also rocketed to 97 923, its highest level since July 2015.
Correspondingly, the EUR / USD collapsed to 1.0844, the lowest level since August. Market participants seem to reconcile that statement with a speech Yellen dovish ECB Mario Draghi on the same day, and concluded that the contrast between the two central bank policy is a compelling reason to busy to remove Euro. GBP / USD also fell to 1.5361, while USD / JPY reached the 121.71 level which previously had touched on 24 October.
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