The USD remains unchanged
Asian forex trades finished with the firm United States dollar in relation to majors as the Federal Reserve made no surprises for the markets after the interest rate decision was taken. The interest rates remained unchanged as it was forecasted. The Fed’s officials repeated its fears about the possible growth of the inflation and gave no hints where the interest rates will move in future. The Federal Reserve make no changes in the level of interest rate even after the announcement of the European Central Bank to raise the rates in July.
According to the currency strategist at DBS Bank in Singapore the results of the FOMC meeting were quite balanced. Due to the last data the Euro was traded at the $1.5674 and the USD – at 107.93 yen. As for the investors, they waited for the last week US core inflation report before making any changes in the major currencies. The level of the core inflation is the main factor the Federal Reserve considers when determining the changes in the level of the consumer prices.
The final statement of the Federal Reserve showed some positive changes in the economy of the country. However it has also pointed that the growth of the energy prices may contribute to the slowdown of the economy growth and speeding up of the inflation. Due to the chief economist at NAB Capital Markets Rob Henderson the main thing is that the Federal Reserve changed its position from the neutral one to more definite actions. He has added that the Federal Reserve is nevertheless not expected to act so throughout current year. And according to the experts forecasts the interest rate will remain unchanged until the end of the year.
Due to senior forex analyst at Thomson Reuters IFR Markets – John Noonan the Fed is unlikely to make its inflation concerns real.
So the Federal Reserve decreased interest rates by 325 bp since the last September and the ECB kept its rates unchanged at the 4 percent level since the last June.
