Safe haven currency US Dollar weaker as Wall Street was sharply lower on Tuesday morning, with indexes pulling away from record levels, after New York Federal Reserve President William Dudley said an interest rate in September was possible. As reported by Reuters "The labor market is getting tighter and we're starting to see signs of wage gains starting to accelerate, so I think we're getting closer to that point in time when it will be appropriate to actually raise short-term rates again," Dudley, a permanent voting member of the Federal Reserve, said in an interview on Fox Business Network.
New York federal reserve president Dudley's comments raised expectations among traders of an interest rate hike this year - they now see a 12 percent chance of a hike in September, rising up from 9 percent before Dudley's comments. As that comments, measure increased to 37.8 percent from 37.4 percent for December, according to CME Group's FedWatch tool.
Meanwhile, safe haven currency US dollar .DXY pared earlier losses, but remained near its lowest level this month, after Dudley's comments. Forex Brokers and Investors will pore over the minutes of the Fed's July policy meeting, scheduled for release on Wednesday, for clues on the central bank's rate plans after a blowout June jobs data. However, data on Tuesday showed U.S. consumer prices were unchanged in July as the cost of gasoline fell for the first time in five months and underlying inflation moderated.
For your Information, The Fed has a 2 percent inflation target and tracks an inflation measure which has been stuck at 1.6 percent since March, just for monitoring next act of Federal Reserve interest rate hike
Source : fox business network, Reuters
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