Following recent concerns about the possible deterioration in the world’s financial powerhouse, the United States, these fears were allayed following the release of positive United States sales figures.
With the Federal Reserve set to meet this week to discuss policies, this announcement let to a steadying of the dollar. With opinions running high that the Federal Reserve’s meeting may result in a cut in interest rates, dealers are looking at a decision not at present, but in the months ahead.
The value of the dollar rose to 97.583 on Friday, a high since early June and has remained steady at 97.509 against six of the world’s major currencies.
What prompted the interest rate cuts?
With the economic indicators declining to a two and a half month low of 96.459 following a less than satisfactory United States employment report, the likelihood of a rate cut increased.
The meeting of the Federal Reserve has been scheduled for June 18 – 19 and predictions of a cut in interest rate reduced from an initial 28.3% to 21.7% on Thursday, according to the CME Group’s FedWatch data. Expectations, however, of a possible cut at the July meeting remain high at 85%.
A senior Foreign Exchange planner at IG Securities in Tokyo, Junichi Ishikawa, stated that both the Euro and adversaries were currently also weak, thus boosting the value of the US dollar.
The dollar has the upper hand pending the cut in rates by the Federal Reserve either immediately or at a later stage as it appears that the European Central Bank is considering doing the same.
A slow-down in growth and price hikes being below what anticipated, the European Central Bank discussed the possibility of more significant incentives leading to a rate cut and additional buying of assets.
The effect of this on the rest of the world
With the ongoing United States and China trade dispute, the financial institutions of Australia and New Zealand are dealing with the same situation as the international economic systems await the outcome which could prove detrimental for all trading partners of these countries.
Australia saw its bond appreciation dip to an all-time low last week as traders await another cut in rates by the Reserve Bank of Australia who earlier in the month had cut rates to a rate of 1.25% – not ever seen before.
The Euro remained steady at $1.1216 after it lost 0.6% of its value on Friday, setting the currency at an eight-day low of $1.1203.
The Australian dollar regained some of its value, improving by a meager 0.1% to S0.6878 but still not far away from the five-month bottom level of $0.6862 on Friday when the Australian currency lost 0.7% of its value. The New Zealand dollar lost more than 1% of its value in the prior period and was trading at a three week low of $8.6488 towards the latter part of last week.
The Japanese Yen was steady at 108.570 to the dollar after Friday when it increased slightly by 0.15%.
The post Foreign Exchange Dollar Rallies at a Two-Week High appeared first on FXTimes.com – Daily Cryptocurrency and FX News .
This is a syndicated post from https://www.cryptovibes.com/fx-industry/foreign-exchange-dollar-rallies-at-a-two-week-high/