After yesterday’s US Federal reserve meeting where it was decided to raise the key rate a second time for almost 10 years, the dollar has risen against most currencies at auction around the world. On Thursday, the growth continued, writes

The index of the dollar against a basket of six currencies of countries with which the United States have the highest turnover, on the morning of 15 December reached 102,62 points – its highest since January 2003.

The Euro fell to 1,0468 dollar, while in 0.2% of new at least 13 years old. The yuan fell from 6.9 to 6.95 yuan per dollar on the background of a record in the history of the collapse of the bond market of China, for a week to lose the growth of the last fifteen years.

People’s Bank of China (Chinese Central Bank) has set the official exchange rate on Thursday at a new lowest level since 2008. The Japanese yen drop to fresh lows since February, falling to 117,86 per dollar.

The dollar on the Moscow stock exchange the night before, was up by 1.4 ruble – to 62.1 per ruble. On Thursday against the background of sales of foreign currency by exporters, the rouble played the lost and the 16:10 Moscow time bargained at 61,39 to the dollar.

Raising the fed rate by 25 basis points to 0,5-0,75%, was 100% expected, the probability increase, based on the futures rate on Federal funds was 100%.

Surprise was the decision of members of the open market Committee of the fed to go for another three raises in 2017 instead of two, analysts explain. In 2018, the fed expects two rate hike. As for 2019, the individual representatives of the regulator does not rule out three or more times. In the long term, the fed still predicts the rate at 3%.

The market now expects the fed raises 2017 – futures rate lay at a level above 1% per annum in January-2018.
This may not be sufficient to ensure that the dollar continued the most ambitious for several decades of rally. The Euro in 2017 for the first time since 2002, will fall to parity with the dollar, and then lower to 0.97 dollars per Euro, predicts, in particular, analysts of Societe Generale.

The fed kept the rate at a record low levels from 2007 to 2016. So the U.S. monetary authorities reacted to the crisis with the help of cheap loans, they tried to “restart” the economy. The explosive effect is not given, but the American economy all these years showed steady growth.

After the fed’s rate hike, the dollar rose sharply against the Euro and other world currencies 22.12.2016

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