The dollar is rising against all of its major competitors Monday afternoon, extending its gains from Friday. Investors were plagued by concerns over the health of the global economy late last week, after the Federal Reserve decided to leave interest rates unchanged. However, recent comments from Fed officials has traders feeling more confident that a rate hike will be announced before the end of the year and perhaps as soon as October.
Speaking at a weekend conference on the China-U.S. financial system, San Francisco Fed President John Williams stated that the next appropriate step is a gradual rate hike, likely starting sometime later this year, given continued growth in economic and labor market.
Global developments “definitely present significant challenges and risks, but overall I am quite positive about the outlook for the U.S. economy,” he said.
In an interview with CNBC, St. Louis Fed President James Bullard said the central bank could raise rates next month but noted that many things can change from one meeting to the next.
“There’s a powerful case to be made that it’s time to raise interest rates,” Bullard said. “And the case is not complicated.”
“Policy settings are [in] an emergency,” he added. “The economy itself, the goals of the committee, have essentially been met.”
Bullard, who is not a voting member of the Fed’s policy setting committee, said he would have joined Richmond Fed President Jeffrey Lacker in dissenting against the Fed’s decision to leave rates unchanged.
Existing home sales in the U.S. fell by much more than expected in the month of August, according to a report released by the National Association of Realtors on Monday. NAR said existing home sales tumbled by 4.8 percent to a seasonally adjusted annual rate of 5.31 million in August from a downwardly revised 5.58 million in July.
Economists had been expecting existing home sales to dip to a rate of 5.50 million from the 5.59 million originally reported for the previous month.
The dollar has broken out to a week and a half high of $1.1195 against the Euro Monday afternoon, from Friday’s low of $1.1459.
German producer prices declined at a faster-than-expected pace in August, figures from Destatis showed Monday. Producer prices fell 1.7 percent year-over-year in August, following a 1.3 percent decrease in the previous month. Economists had forecast a 1.6 percent drop for the month. Producer prices have been falling since August 2013.
The buck has also risen to around $1.5495 against the pound sterling, from Friday’s 3-week low of $1.5657.
The greenback has also climbed to around Y120.450 against the Japanese Yen, from Friday’s low of Y119.050.
The material has been provided by InstaForex Company – www.instaforex.com