Here’s what’s going on for the Greenback
The EUR/USD on Friday decreased by 0.8%.
And on a weekly basis, the world’s most popular currency pair fell by 0.9%.
The probability of the Federal Reserve increasing interest during this year have increased according to its Chairwoman Janet Yellen.
What lead to this situation:
During her annual speech, which once again took place at Jackson Hole, she supported the Fed’s initial plan for gradual increases to interest rates but also said that there is a “strengthened” probabil-ity for another rate hike.
Yellen supported her comments by saying that there has been continuous strong performance from the unemployment sector, while the Fed’s inflation outlook has also increased
However, she pointed that the Bank’s future decisions will depend on upcoming economic data re-ports.
Last Friday’s speech given by Ms Yellen raised the probability of an interest rate increase during next month, as long as the upcoming Nonfarm Payrolls (NFP) report shows further strengthening of the labour market.
The NFP data are expected for release this Friday 02 September at 12:30 GMT.
What is next:
Prior to the speech given by the Fed Chairwoman, the markets were not very hopeful for an interest rate increase for next month and many investors have even settled for interest rates to remain at the same level until the end of the year.
The last time the Fed decided to increase interest rates was just before the end of 2015, by 0.25%.
So it seems that the Fed is aiming to push the markets to begin pricing in an interest rate increase during for this year.
All eyes will be turned to the upcoming NFP this Friday.
So, big week for the US dollar. What are your thoughts, is the Fed finally going to raise the rates? Will the dollar surge in response?