EUR/USD Impact : Dollar Climbs, Treasuries Fall as Fed Looms With Stocks Mixed


Good day forex traders.

Speculations of further US Federal Reserve interest rate hikes have increased. As mentioned always, a tightening phase is usually beneficial to a currency’s value. Supplies go down when easing reduces. This may have a potential impact on the EUR/USD in the upcoming months.

Has the Federal Reserve Already Achieved Its Mandate? The dollar extended its best run of gains in a month, Treasuries fell and U.S. stocks fluctuated as investors speculated the Federal Reserve will reaffirm its intention to raise interest rates this year even as global growth remains tepid.

The Standard & Poor’s 500 Index gyrated near its average price for the past 200 days as attention focuses on the Fed’s assessment of the American economy and its ability to withstand tighter monetary policy. European shares slipped a second day. The dollar climbed versus the yen on speculation Japan could lower rates further into negative territory, while the pound weakened amid a lower growth outlook for the U.K. Oil rebounded past $37 a barrel. Economists now anticipate two rate increases this year, with the odds of a hike after today’s meeting near zero, according to Bloomberg surveys. Data Wednesday bolstered the case for tightening this year with inflation creeping toward the Fed’s targets. Investors will focus on clues on the timing of future increases and how Fed Chair Janet Yellen characterizes global growth and the financial-market turmoil that sent stocks to the worst start to a year on record.

“There’s a solid consensus that the Fed won’t raise rates today, but we’re looking out to the rest of the year and the markets are doing that, too,” said Anna Rathbun, director of research for CBIZ Inc.’s retirement plan services unit in Cleveland, Ohio. The firm manages about $10 billion. […]

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