The dollar is falling against both the Euro and the Japanese Yen Tuesday, but is up slightly against the pound sterling. There have been no U.S. economic reports to drive the direction of trading since the start of the trading week.
St. Louis Fed President James Bullard stated that there is more than 50 percent chance for a Fed rate hike in September.
“I see September having a 50 per cent probability right now” for a boost in the Fed’s overnight short-term interest rate target, Bullard told Fox Business Network.
“The economy is much closer to normal today than it’s been in quite a while, certainly over the last five years,” he added.
Last week, Federal Reserve Chair Janet Yellen reiterated that U.S. interest rates will probably rise later in the year.
Meanwhile, Greece cleared its first hurdle in the bailout crisis by repaying the money due to the International Monetary Fund and the European Central Bank with the European Commission’s EUR 7.16 billion bridge-loan, and banks in the crisis struck country opened partially despite stock exchange closure.
The Greek government also paid money owed to the Greece’s central bank. In total, the government repaid EUR 6.8 billion to its creditors.
In an official release, Gerry Rice, Director of Communications at the International Monetary Fund, confirmed that Greece repaid the totality of its arrears worth about EUR 2.0 billion to the IMF.
“Greece is therefore no longer in arrears to the IMF. As we have said, the Fund stands ready to continue assisting Greece in its efforts to return to financial stability and growth,” said Rice.
The dollar rose to an early high of $1.0811 against the Euro Tuesday, but has since dropped to a 4-session low of $1.0950.
U.K. Chancellor of the Exchequer George Osborne demanded the government departments to find GBP 20 billion in savings to public spending to eliminate the deficit by 2019/2020.
In the Spending Review 2015 launched Tuesday, Osborne said he plans to eliminate the deficit and run a surplus, and ensure Britain lives within its means.
The review to be published on November 25 will set out how the government will both invest in priority public services and deliver the GBP 20 billion further savings required to eliminate the budget deficit.
The Chief Secretary will write to government departments asking them to draw up plans to deliver the remaining required consolidation.
The buck climbed to a high of $1.5528 against the pound sterling Tuesday morning, but has since eased back to around $1.5560.
U.K. public sector net borrowing decreased in June from last year, the Office for National Statistics said Tuesday. Excluding public sector banks, PSNB dropped GBP 0.8 billion to GBP 9.4 billion in June. It was equivalent to 0.5 percent of gross domestic product.
Members of the Bank of Japan’s monetary policy board said that the country’s economic recovery continues to grow at a satisfactory pace, minutes from the board’s June 18-19 meeting revealed on Tuesday.
The recovery is expected to continue, the board said, although downside risks include the European debt situation and the state of commodity exporters.
“Japan’s economy has continued to recover moderately. Overseas economies – mainly advanced economies — have been recovering, albeit with a lackluster performance still seen in part,” the minutes said.
The greenback has fallen to 3-session low of Y123.827, from 1-month high of Y124.471 this morning.
The leading index for Japan, which measures the future economic activity, dropped as estimated in May, final figures from the Cabinet Office showed Tuesday. The leading index fell to 106.2 in May from 106.4 in the previous month. The figure was also matched with preliminary data. In March, the score was 105.2.
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