The USD increased ahead of the interest rate decision
The afternoon forex trades in Asia resulted in the growth of the United States dollar in relation to the Euro and Japanese yen. The reason of such growth trend was the talks concerning the possible declaration of the Federal Reserve its intention to increase the interest rates with the aim to constrain the inflation. The FOMC begins today the meeting that will end with the decision concerning the level of the new interest rate. According to the experts’ forecasts the FOMC members will express their intention to increase interest rates and underline the possible risks of the inflation after the decision will be taken. Due to Mark Wan a chief analyst at Hang Seng Investment Services Ltd the reason that leads to the growth of the interest rates is quite simple – it is the inflation caused by the high oil prices.
According to the last data the Euro was traded at $1.5515 and the USD itself was at 108.08 yen.
Due to the head of economic strategy at Bank of America in Tokyo – Tomoko Fujii the Federal Reserve is expected to remain the interest rates at the same level however the outlook for the future says about their intentions to increase the rates by the 0.25 bp at the end of the year. This will appear to be the first increase after a period of decreases from September to April. According to the Bank of America officials the interest rates will keep growing in the next year too.
Due to senior forex analyst at Thomson Reuters IFR – John Noonan the trades results will be unstable until the interest rate decision will be issued. He has added that the Federal Reserve had an intention to pursue more strict policy in relation the inflation to decrease the wage expectations.
