Greenback is powered by Fed rate expectations

26 October, 2016

Greenback is powered by Fed rate expectations

On Wednesday, the US dollar was backed by hopes that American interest rates will edge up by the year-end. It stood flat during Asia trade, just below a nine-month high reached overnight, while the Australian dollar earned as inflation data doused the probability of a rate drop there.

In Australia, consumer prices managed to rebound by more than forecast the previous quarter, while the annual pace of core inflation rose for the first time a year, thus leading traders to price out almost any likelihood of a near-term drop in interest rates.

The Reserve Bank of Australia holds its monthly policy gathering next week and it’s supposed to keep rates at a record minimum of 1.5%.

The Aussie leapt to $0.7709 from $0.7645 before the news. Last it rose 0.5% on the day at $0.7684.

The common currency stood still at $1.0890, having slipped to an almost eight-month minimum of $1.0848 on Tuesday.

Against the Japanese yen, the greenback stood at 104.24, quite flat on the day, though not far from a roughly three-month peak of 104.87 yen achieved overnight during American trading.


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