US dollar is gaining against all comers today, thanks to expectations that a rate hike is coming by the end of 2016. Between the latest clues in economic data and Janet Yellen’s speech in Jackson Hole last week, many expect to see at least one more rate increase from the Fed before the year closes out.
Last week in Jackson Hole, Fed Chair Janet Yellen laid out her plan to fight the next recession and spoke in an upbeat manner about the current state of things. She said that the case for a Federal Reserve rate hike before the end of the year has been strengthened recently. Other officials seem to be on board as well.
Recent inflation data is one of the indicators being used to determine when the next rate hike will be. The latest PCE price index measure saw an increase in July, moving the needle slightly closer to the 2 per cent rate that the Fed views as a target.
While officials aren’t saying a rate hike is set in stone, they are signaling that one is likely, and that is helping the greenback.
At 15:30 GMT EUR/USD is down to 1.1168 from the open at 1.1179. GBP/USD is down to 1.3077 from the open at 1.3111. USD/JPY is up to 102.40 from the open at 102.07.
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