The dollar is rising against both the Euro and the British pound Tuesday afternoon, extending its gains from the previous two trading sessions. However, the U.S. currency is down slightly in comparison to the Japanese Yen. Fed officials continue to build a case to raise interest rates before the end of the year, in an attempt to ease investor concerns after the Fed decided to keep rates unchanged last week.
While speaking at Atlanta, the Federal Reserve Bank of Atlanta President Dennis Lockhart said that the economy is performing “solidly,” which makes him confident about a rate hike later this year.
“As things settle down, I will be ready for the first policy move on the path to a more normal interest rate environment,” he told Monday. “I am confident the much-used phrase ‘later this year’ is still operative,” he added.
His comments echoed those made by three other regional Fed presidents – San Francisco’s John Williams, St. Louis’s James Bullard and Richmond’s Jeffrey Lacker – who supported lifting the central bank’s near zero interest rate before this year end.
Investors are eagerly anticipating a speech by Fed Chair Janet Yellen at an University of Massachusetts event on Thursday.
There was no U.S. economic data to drive the direction of trading today and there is no major data due to be released on Wednesday either. However, investors can look forward to durable goods orders and new home sales on Thursday. Readings on GDP and consumer sentiment are also slated to be released on Friday.
The dollar has risen to a 2-week high of $1.1125 against the Euro Tuesday afternoon, from Friday’s low of around $1.1450.
Germany’s real wages grew at the fastest pace on record in the second quarter, data from Destatis revealed Tuesday. Real wages advanced 2.7 percent in the second quarter from last year, this was the fastest growth since the series began in 2008. Wages increased 2.5 percent in the first quarter.
The buck has also climbed to around $1.5365 against the pound sterling, from Friday’s low of around $1.5650.
U.K. budget balance showed its biggest shortfall for August in three years as tax revenue declined from last year, data published by the Office for National Statistics showed Tuesday. Public sector net borrowing excluding public sector banks increased by GBP 1.4 billion from last year to GBP 12.1 billion in August.
This was the largest deficit for August since 2012. Economists had forecast the deficit to widen to GBP 9.2 billion.
The greenback has pulled back to around Y119.990 against the Japanese Yen this afternoon, from yesterday’s high of Y120.537.
The material has been provided by InstaForex Company – www.instaforex.com