Yellen says Fed could raise interest rates ‘relatively soon’

In early trade in Europe, the greenback fell around 0.2 percent against the basket of currencies that measures its broader strength, a half point off nearly 14-year highs hit on Wednesday. That’s seen a rally in stocks, a sell-off of US bond yields and a concurrent rise in the dollar. For example, before the Fed raised rates in December 2015, the tiniest hint of a rate hike caused the dollar to surge.

Fed Chair Janet Yellen will testify before Congress later in the day. Despite the remarkable sell-off in the USA bond markets, the significant upside shift in the USA sovereign curve and rising inflation expectations, suggests Janet Yellen is expected to sound cautious and to refrain from giving too much credit to recent turbulences in the financial markets.

Trump’s promise to grow the US economy through infrastructure spending has markets thinking that could spark inflation and lead the Fed to tighten monetary policy even further.

United States interest rate futures are pricing in a 94 per cent chance of a rate hikeof 25 basis points at the next Fed meeting, scheduled for December, according to Bloomberg. While the dollar may take a breather following the announcement, expect the greenback to maintain its bullish bias through the early part of December. NY time. The greenback rose as high as 109.76, the most since June, and appreciated 0.3 percent to $1.0692 per euro. The sterling is now trading at $1.6766 Canadian. It was last up 0.14 per cent at 100.37.

The euro is down 0.2% at 1.0699, as it dips below 1.0700 for the first time in 11.5 months.

There has been a massive jump towards a rate hike since the start of the month. Nguyen said the uncertainty about what Trump will do is high, noting that it is unclear what his financial plans are, or whether he will implement conservative trade policies.

Wholesale prices in the US were unexpectedly weak in October as declines in the costs of services offset increases in goods.

And finally, the Indian rupee is set for further weakness as a result of Mr Modi’s actions from last week.

Wal-Mart Stores fell 2.9 percent to $69.29 after the world’s largest retailer reported lower-than-expected quarterly comparable sales. A core measure that excludes food and energy is expected to increase modestly as higher medical costs offset softness in airline fares and hotel rates, Alexander says. The greenback was 0.17% lower against both its Canadian counterpart and the euro, trading at CAD$1.3423 and 0.9324 euro cents respectively. Next support in the cross will come in at 145.50 levels.