Iraqi Dinar News

Trade Iraqi Dinar

Posts tagged: Dollar

NZ Dollar Gains on Fonterra Dairy-Price Forecast

By , August 27, 2014 7:04 am

All NZD denominationsThe New Zealand dollar climbed today after Fonterra Cooperative Group Ltd., the world’s biggest dairy exporter, maintained its milk-price forecast on expectations that China will increase imports.

China reduced its purchases of dairy products after building up inventories, making Fonterra cut its forecast previously. Many analysts had expected another cut today and were relieved to see that the forecast remained unchanged as the group expects China to boost dairy imports. Milk products account for almost a third of the Australia’s exports.

NZD/USD climbed from 0.8330 to 0.8369, and NZD/JPY advanced from 86.69 to 86.95 as of 12:06 GMT today.

If you have any questions, comments or opinions regarding the New Zealand Dollar, feel free to post them using the commentary form below.

Earlier News About the New Zealand Dollar:

Forex News

Dollar Pares Gains After Opening Sharply Higher

By , August 25, 2014 4:58 pm

A sheet of new hundred-dollar billsThe US dollar declined today against its most-traded peers, yet it is important to understand that the currency opened sharply higher, meaning that it still trades above the last week’s closing rate against most majors.

The hawkish Federal Reserve minutes as well as the relatively balanced stance of Chairperson Janet Yellen allowed the dollar to surge. While the currency lost its gains versus the Great Britain pound, returning to the Friday’s closing level, it still trades above the Friday’s close versus the Japanese yen and near the highest rate since September against the euro.

The greenback will likely maintain its bullish bias unless this week’s economic data spoils the optimistic outlooks for the economy of the United States. Truth be told, today’s reports were not particularly helpful as the Markit Flash Services Purchasing Managers’ Index fell more than was expected and the new home sales trailed forecasts. Yet there are still plenty reports to be released later this week, and they may reinvigorate optimism for US economic growth.

EUR/USD traded at about 1.3191 as of 21:45 GMT today after closing at 1.3243 on Friday and opening at 1.3194 today. GBP/USD traded not far from the the Friday’s close of 1.6573 after opening at 1.6547. USD/JPY declined from 104.26 to 104.04.

If you have any questions, comments or opinions regarding the US Dollar, feel free to post them using the commentary form below.

Forex News

US Policy Outlook Spurs Dollar to Weekly Gains

By , August 23, 2014 7:50 am

Ulysses S. Grant on US 50-dollar billThis week was very positive for the US dollar, allowing it reach a new high for this year against the euro and to gain against other major peers. The major reason for the rally was the comments of US policy makers.

The minutes of the latest Federal Reserve policy meeting demonstrated that US Fed members are considering raising interest rates earlier. Economic data from the United States supported the optimistic outlook for US economic growth.

Another major event was the speech of Fed Chairperson Janet Yellen at the Jackson Hole Symposium. She remarked on the labor market improvement:

More jobs have now been created in the recovery than were lost in the downturn, with payroll employment in May of this year finally exceeding the previous peak in January 2008.

She added:

Over the past year, the unemployment rate has fallen considerably, and at a surprisingly rapid pace.

While the tone of her speech was not completely hawkish, more dovishness was priced in, allowing the dollar to rally. The gains were limited, though, due to profit-taking.

EUR/USD dropped from 1.3392 to 1.3243 — the lowest weekly close since September. GBP/USD declined from 1.6728 to 1.6573, the lowest close since March, over the week, while USD/JPY advanced from 102.32 to 103.95 — the strongest weekly closing rate since January.

If you have any questions, comments or opinions regarding the US Dollar, feel free to post them using the commentary form below.

Forex News

US Policy Outlook Spurs Dollar to Weekly Gains

By , August 23, 2014 7:50 am

Ulysses S. Grant on US 50-dollar billThis week was very positive for the US dollar, allowing it reach a new high for this year against the euro and to gain against other major peers. The major reason for the rally was the comments of US policy makers.

The minutes of the latest Federal Reserve policy meeting demonstrated that US Fed members are considering raising interest rates earlier. Economic data from the United States supported the optimistic outlook for US economic growth.

Another major event was the speech of Fed Chairperson Janet Yellen at the Jackson Hole Symposium. She remarked on the labor market improvement:

More jobs have now been created in the recovery than were lost in the downturn, with payroll employment in May of this year finally exceeding the previous peak in January 2008.

She added:

Over the past year, the unemployment rate has fallen considerably, and at a surprisingly rapid pace.

While the tone of her speech was not completely hawkish, more dovishness was priced in, allowing the dollar to rally. The gains were limited, though, due to profit-taking.

EUR/USD dropped from 1.3392 to 1.3243 — the lowest weekly close since September. GBP/USD declined from 1.6728 to 1.6573, the lowest close since March, over the week, while USD/JPY advanced from 102.32 to 103.95 — the strongest weekly closing rate since January.

If you have any questions, comments or opinions regarding the US Dollar, feel free to post them using the commentary form below.

Forex News

Will Sanctions Sideline the U.S. Dollar?

By , August 22, 2014 5:04 pm
sanctions-global-reserve-currency-dollar

While U.S. sanctions against Russia’s will inflict economic pain on Moscow, in the long run the U.S. government may lose some of its control over international finance. (Photo: Wikimedia Commons)

The use of sanctions as an international cudgel has long been complicated by some nasty unintended consequences.

For the United States and the world economy, one consequence could be particularly significant: The recent round of sanctions aimed at Moscow over the crisis in Ukraine could backfire on Washington by accelerating a move away from the dollar as the world’s reserve currency.

While in the short run American actions against Russia’s oil and gas industry will inflict economic pain on Moscow, in the long run the U.S. government may lose some of its control over international finance.

A World Beyond the IMF

Proposals to move away from using the dollar as the international currency reserve are by no means new. Back in 2009, the Shanghai Cooperation Organization (SCO) proposed doing exactly that. SCO members include Russia, China, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan. Afghanistan, Iran, India, Pakistan, and Mongolia have SCO observer status, and the organization has close ties with Turkey and the Association of Southeast Asian Nations.

Ever since the 1944 Bretton Woods Conference, the world’s finances have been dominated by the U.S. dollar, the International Monetary Fund (IMF), and the World Bank. But according to economist Jeffrey Sachs, that world is vanishing. The dollar cannot continue to hold the high ground, Sachs says, because “the role of the United States in the global economy is diminishing.”

While it may be diminishing, the United States and its European allies still control the levers of international finance. For example, the U.S. slice of the global GDP is 19.2 percent, and its share of IMF voting rights is 16.8 percent. In contrast, China, with 16.1 percent of the global GDP, has only 3.8 percent voting rights in the IMF. The presidency of the organization is reserved for a European.

In 2010, the World Bank “reformed” its voting rights to increase low and middle-income countries from 34.67 percent to 38.38 percent, although even this modest adjustment has been sidelined because the U.S. Senate refuses to accept it. The wealthier countries still control more than 60 percent of the vote. The presidency of the Bank normally goes to an American.

In early August of this year, the BRICS countries—Brazil, Russia, India, China, and South Africa—launched a series of initiatives aimed at altering the current structure of international finance. Besides pushing to dethrone the dollar as the world’s reserve currency, the organization created a development bank and a Contingent Reserve Arrangement (CRA). The former would allow countries to bypass the IMF and the World Bank, with their tightfisted austerity fixation, and the latter would give countries emergency access to foreign currency.

The development bank will start off with $ 50 billion in the kitty, but that will soon double. The BRICS will also be able to draw on $ 100 billion from the CRA. While by international standards those are modest sums—the IMF has close to $ 800 billion in its coffers—the BRICS bank and CRA has just five members, while the IMF serves hundreds of countries. Eventually the BRICS observer members may be able to tap into those funds.

Sanctions and Blowback

Last month’s sanctions went straight for Russia’s jugular vein: the development of its massive oil and gas reserves and Moscow’s construction of the South Stream pipeline. When completed, South Stream will supply Europe with 15 percent of its natural gas and generate over $ 20 billion in annual profits. Indeed, there is suspicion among some Europeans that the real goal of the sanctions is to derail South Stream and replace it with U.S. shale-based American oil and gas.

Sanctions can do enormous damage.

The United Nations estimates that the sanctions against Iraq were responsible for the deaths of some 500,000 Iraqi children from 1991 to 1998.

The sanctions aimed at Iran’s oil and gas industry have cut deeply into government revenues—80 percent of the country’s foreign reserves are generated by hydrocarbons—resulting in widespread inflation, unemployment, and a serious national health crisis. While humanitarian goods are not embargoed, their cost has put medical care beyond the reach of many Iranians.

Associated Press reporter Nasser Karimi wrote last year that some medicine and medical equipment costs have risen 200 percent: “radiology film up 240 percent; helium for MRIs up 667 percent; filters for kidney dialysis up 325 percent.” The cost of chemotherapy has almost tripled.

Iran’s exclusion from the Society for Worldwide Interbank Financial Telecommunication (SWIFT) makes it impossible to transfer funds electronically. That, in turn, makes buying the raw materials to manufacture generic medicines expensive and difficult.

The recent crash of an Iranian passenger plane that killed 39 people was, in part, the result of sanctions. Because Iran cannot purchase spare parts for its Boeing and Airbus planes, it is forced to use alternatives, like the trouble-prone Ukrainian-made A-140 aircraft that went down on August 10. Another A-140 crashed in 2002, killing 46 passengers.

In short, opposing the U.S. and its allies can be dangerous to one’s health.

There is growing opposition to the widespread use of sanctions, as well as to the ability to isolate countries from international finance by excluding them from things like SWIFT. Coupled with this is a suspicion that the United States uses its currency to support its own economy at the expense of others.

After the 2007-2008 economic meltdown, for example, the U.S. central bank lowered its interest rates and increased its money supply, thus making U.S. exports cheaper and other countries’ imports more expensive. Developing countries have blamed these policies for artificially driving up the value of their currencies and thus damaging their export-driven economies. Brazilian Finance Minister Guido Mantega calls it waging “currency war.”

With the United States now pushing higher interest rates and throttling back on buying foreign bonds, many developing countries fear that international capital will flow back to the U.S., leaving countries like Brazil high and dry.

Sidelining Washington

As long as the world’s reserve currency is in dollars, the U.S. will be able to manipulate global finance and block countries like Iran from any transactions using dollars. But that may be coming to an end. With China set to replace the United States as the world’s largest economy, it is only a matter of time before the renminbi—or some agreed upon international method of exchange—replaces the dollar.

China is already moving toward bypassing New York as the world’s financial center, instead routing its finances through Hong Kong and London. “There can be little doubt from these actions that China is preparing for the demise of the dollar, at least as the world’s reserve currency,” says Alasdair Macleod of GoldMoney, a leading dealer in precious metals.

A number of countries are already dealing in other currencies. Australian mining companies, for example, have recently shifted to using China’s renminbi.

How dumping the dollar will affect the United States is not clear, and predictions of the impact range from minor to catastrophic. What will almost certainly happen is that the United States will lose some of its clout in international finance, making it easier for developing countries to move away from the American economic model of wide-open markets, fiscal austerity, and hostility to any government role in the economy.

Diminishing the role of the dollar may make it harder to apply sanctions as well, particularly in those areas where Washington’s policies are increasingly alienated from much of the world, as in Iran, Cuba, and Russia. The European Union (EU) has sanctioned Russia over Ukraine, but not to the extent that the United States has. The EU’s trade with Russia is a major part of the Europe’s economy, while Russian trade with the United States is minor. And the BRICS—who represent almost a quarter of the world’s GDP and 40 percent of its population—did not join those sanctions.

Addressing the BRICS delegates in Fortaleza, Brazil, Russian President Vladimir Putin said that “together we should think about a system of measures that would help prevent the harassment of countries that do not agree with some foreign policy decision made the by the U.S. and their allies.”

In the long run, the EU may come to regret that it went along with Washington. German industry has taken a big hit—trade with Russia fell 20 percent from January through May—and Russia’s ban on EU agricultural products has badly hurt Poland, Lithuania, Germany, Denmark, Latvia, Finland, and the Netherlands. Indeed, European Central Bank president Mario Draghi warned that the current EU recovery is extremely fragile and that sanctions could push it back into recession.

The Germans are especially worried that Russia will turn to Asia, permanently cutting Berlin out of Moscow’s economic sphere.

Trouble Ahead

There are enormous changes ahead as a result of climate change and population growth. While there has been a reduction in the number of people living in extreme poverty—that is, making less than $ 1.25 a day—a great deal of that reduction has occurred in China. Things have actually gotten worse in parts of Asia and Africa.

By 2050 the world’s population will grow to 9 billion, and 85 percent of that growth will be in developing nations, the very countries that most need help to confront the consequences of that future.

Unless the institutions of international finance are wrested from the control of a few wealthy nations, and unless there are checks on the ability of the United States and its allies to devastate a country’s economy over a disagreement on foreign policy, those figures bode for some serious trouble ahead.

Foreign Policy In Focus

US Data Keeps Dollar Strong

By , August 21, 2014 8:27 pm

Packs of US 100-dollar billsEconomic data from the United States allowed the US dollar to rally against its major peers, including the Great Britain pound and the Japanese yen, yesterdays and to maintain gains today. The currency fell against the euro but not before reaching the highest price since September.

A range of US macroeconomic indicators was released yesterday, and all of them were positive. The data followed the hawkish Federal Reserve minutes that were released on Wednesday. All these factors contributed to the strength of the greenback.

It was surprising to see that the dollar was unable to maintain its rally versus the euro. The likely reason for this is the upcoming speech of Fed Chairwoman Janet Yellen at the Jackson Hole symposium. Most market analysts believe that the speech will also be positive for the US currency and the current drop versus the euro was just a bit of profit-taking.

EUR/USD traded at 1.3279 as of 2:47 GMT today after rising from 1.3259 to 1.3280 yesterday. GBP/USD was at about 1.6575 following the drop from 1.6593 to 1.6579. USD/JPY traded near 103.78 after rising from 103.74 to 103.84.

If you have any questions, comments or opinions regarding the US Dollar, feel free to post them using the commentary form below.

Forex News

“The Financial System Is Vulnerable,” NYFed Asks “Could The Dollar Lose Its Reserve Status?”

By , August 21, 2014 4:01 am

“The Financial System Is Vulnerable,” NYFed Asks “Could The Dollar Lose Its Reserve Status?”
By: Zerohedge on: 21.08.2014 [07:16 ] (51 reads)

“The Financial System Is Vulnerable,” NYFed Asks “Could The Dollar Lose Its Reserve Status?”
Submitted by Tyler Durden on 08/20/2014 22:17 -0400

Bank of New YorkCentral BanksChinaCounterpartiesEurozoneFederal ReserveFederal Reserve BankFederal Reserve Bank of New YorkFinancial RegulationFinancial Stability ReformKrugmanLehmanLehman BrothersMonetary PolicyNew York FedrecoveryRenminbiReserve CurrencySovereign RiskSovereign RiskSovereignsSwiss National BankVolatility

.
When a tin-foil-hat-wearing blog full of digital dickweeds suggest the dollar’s reserve currency status is at best diminishing, it is fobbed off as yet another conspiracy theory (yet to be proved conspiracy fact) too horrible to imagine for the status quo huggers. But when the VP of Research at the New York Fed asks “Could the dollar lose its status as the key international currency for international trade and international financial transactions,” and further is unable to say why not, it is perhaps worth considering the principal contributing factors she warns of.

Via The World Economic Forum blog,

Could the dollar lose its status as the key international currency for international trade and international financial transactions, and if so, what would be the principal contributing factors?

Speculation about this issue has long been abundant, and views diverse. After the introduction of the euro, there was much public debate about the euro displacing the dollar (Frankel 2008). The monitoring and analysis included in the ECB’s reports on “The International Role of the Euro” (e.g. ECB 2013) show that the international use of the euro mainly progressed in the years prior to 2004, and that it has largely stalled since then. More recently, the euro has been displaced by the renminbi as the debate’s main contender for reducing the international role of the dollar (Frankel 2011).

This debate has mainly argued in terms of ‘traditional’ determinants of international currency status, such as country size, economic stability, openness to trade and capital flows and the depth and liquidity of financial markets (Portes and Rey 1998). Considerations regarding the strength of country institutions have more recently been added to the list. All of these factors influence the ability of currencies to function as stores of value, to support liquidity, and to be accepted for international payments. Inertia also plays a role (e.g. Krugman 1984, Goldberg 2010), raising the bar for currencies that might uproot the status quo.

We argue here – building on discussions we began during the World Economic Forum Summit on the Global Agenda 2013 – that the rise in global financial-market integration implies an even broader set of drivers of the future roles of international currencies. In particular, we maintain that the set of drivers should include the institutional and regulatory frameworks for financial stability.

The emphasis on financial stability is linked with the expanded awareness of governments and international investors of the importance of safety and liquidity of related reserve assets. For a currency to have international reserve status, the related assets must be useable with minimal transaction-price impact, and have relatively stable values in times of stress. If the risk of banking stress or failures is substantial, and the potential fiscal consequences are sizeable, the safety of sovereign assets is compromised exactly at times of financial stress, through the contingent fiscal liabilities related to systemic banking crises. Monies with reserve-currency status therefore need to be ones with low probabilities of twin sovereign and financial crises. Financial stability reforms can – alongside fiscal prudence – help protect the safety and liquidity of sovereign assets, and can hence play a crucial role for reserve-currency status.

The broader emphasis on financial stability also derives indirectly from the expanded awareness in the international community of the occasionally disruptive international spillovers of centre-country funding shocks (Rey 2013). We argue that regulatory reforms can play a role in influencing these spillovers. Resilience-enhancing financial regulation of global banks can help reduce the volatility of capital flows that are intermediated through such banks.

On financial stability and reserve-currency status

International reserve assets tend to be provided by sovereigns, notably due to the fiscal capacity of the state and the credibility of the lender of last resort function of the central bank during liquidity crises (see also De Grauwe 2011 and Gourinchas and Jeanne 2012). Systemic financial events can be accompanied by pressures on the government budget, however. While provision of a fiscal backstop to the banking sector is not the best ex ante approach to policy, fiscal support will tend to be forthcoming if the risk and estimated welfare costs of a systemic fallout are otherwise deemed too high.

Yet banking sector risks – and inadequate capacity within the banking sector to absorb these risks – can end up exceeding a government’s ability to provide a credible fiscal backstop without adversely affecting the safety of its sovereign assets. The fiscal consequences of bailouts may result in increased sovereign risk and the loss of safe-asset status, with implications for the status of the currency in question in the international monetary system.

To increase the likelihood that sovereign assets remain safe during systemic events, the sovereign can undertake financial and fiscal reforms that decouple the fiscal state of the sovereign from banking crises. Such reforms should achieve, in part, a reduction in the likelihood of and need for bailouts through increased resilience and loss absorption capacity of the financial system, and by ensuring sufficient fiscal space for credible financial-sector support (see also Obstfeld 2013).

Reform initiatives

A number of current reform initiatives already take steps in this direction. These include:

•Reforms to bank capital and liquidity regulation, which reduce the likelihood that financial institutions, and notably systemically important ones (SIFIs), become distressed;
•Initiatives that seek to counteract the procyclicality of leverage, and to strengthen oversight; and
•Recovery and resolution regimes for distressed systemically important financial institutions (SIFIs) are being improved.
Importantly, initiatives are underway to improve recovery and resolution in the international context. While a global agreement on cross-border bank resolution is currently not in place, bilateral agreements among some pairs of countries are being forged ex ante to facilitate lower-cost resolution ex post. Further, the resilience of the system as a whole is being strengthened, to better contain the systemic externalities of funding shocks. Examples include:

•The strengthening of the resilience of central counterparties and other financial market infrastructures; and
•The foreign currency swap arrangements among central banks to provide access to foreign currency funding liquidity at times when market prices of such liquidity are punishingly high.
Nevertheless, the financial system contains vulnerabilities – globally, as well as in individual currency areas. The negative sovereign banking feedback loop may be weakened in many countries, but has not been fully severed. Moreover, reforms are not necessarily evenly implemented across countries. Fiscal capacities to provide credible backstops of the financial sector during stress vary widely. The consequences of recent reforms for the future of key international currencies are therefore open. Scope remains for countries vying for reserve-currency status to use the tool of financial stability reform to protect the safety and liquidity of their sovereign assets from the contingent liabilities of financial systemic risk.

Financial stability reforms matter for spillovers and capital flows

International capital flows yield many advantages to home and host countries alike. Yet the international monetary system still faces potential challenges stemming from unanticipated volatility in flows, as well as occasionally disruptive spillovers of shocks in centre-country funding conditions to the periphery. With the events around the collapse of Lehman Brothers, disruption in dollar-denominated wholesale funding markets led to retrenchment of international lending activities. Capital flows to some emerging-market economies then recovered with a vengeance as investors searched for yield outside the countries central to the international monetary system, where interest rates were maintained at the zero lower bound. After emerging markets were buoyed by the influx of funds, outflows and repositioning occurred when markets viewed some of the expansionary policies in the US as more likely to be unwound.

While macroprudential measures – and in extreme cases, capital controls – are some of the policy options available for addressing the currently intrinsic vulnerabilities of some capital-flow recipient periphery countries (IMF 2012), we point out that these vulnerabilities can also be addressed in part by financial stability reforms in centre countries.

Consider, for example, the consequences of the regulatory reforms pertaining to international banks that are currently being proposed or implemented. Improvements in the underlying financial strength and loss-absorbing capacity of global banks could have the beneficial side-effect of reducing some of the negative spillovers associated with unanticipated volatility in international banking flows – especially those to emerging and developing economies. Empirical research suggests that better-capitalized financial institutions, and institutions with more stable funding sources and stronger liquidity management, adjust their balance sheets to a lesser degree when funding conditions tighten (Gambacorta and Mistrulli 2004, Kaplan and Minoiu 2013). The result extends to cross-border bank lending (Cetorelli and Goldberg 2011, Bruno and Shin 2013).

While financial stability reforms may reduce the externalities of centre-country funding conditions, they retain the features of international banking that promote efficient allocation of capital, risk sharing and effective financial intermediation. By enhancing the stability of global institutions and reducing some of the amplitude of the volatility of international capital flows, they may address some of the objections to the destabilising features of the current system.

Cross-border capital flows that take place outside of the global banking system have recently increased relative to banking flows (Shin 2013). Regulation of global banks does very little to address such flows, and may even push more flows toward the unregulated sector. At the same time, however, regulators are considering non-bank and non-insurer financial institutions as potential global systemically-important financial institutions (Financial Stability Board 2014).

Conclusions

We have argued that the policy and institutional frameworks for financial stability are important new determinants of the relative roles of currencies in the international monetary system. Financial stability reform enhances the safety of reserve assets, and may contribute indirectly to the stability of international capital flows. Of course, the ‘old’ drivers of reserve currencies continue to be influential. China’s progress in liberalising its capital account, and structural reforms to generate medium-term growth in the Eurozone – as examples of determinants of the future international roles of the renminbi and the euro relative to the US dollar – will continue to influence their international currency status. Our point is that such reforms will not be enough. The progress achieved on financial stability reforms in major currency areas will also greatly influence the future roles of their currencies.

Authors: Linda Goldberg, Vice President of International Research at the Federal Reserve Bank of New York and Signe Krogstrup, Assistant Director and Deputy Head of Monetary Policy Analysis, Swiss National Bank; Member of the World Economic Forum’s Global Agenda Council on the International Monetary System

http://www.zerohedge.com/news/2014-08-20/financial-system-vulnerable-nyfed-asks-could-dollar-lose-its-reserve-status

www.iraq-war.ru (en) RSS feed for articles and news

“The Financial System Is Vulnerable,” NYFed Asks “Could The Dollar Lose Its Reserve Status?”

By , August 21, 2014 4:01 am

Login

register

RU EN ES

Weather

Calendar-Filter

< Aug >   < 2014 >
S M T W T F S
1 2
3 4 5 6 7 8 9
10 11 12 13 14 15 16
17 18 19 20 21 22 23
24 25 26 27 28 29 30
31
Today

Error

Article not found

Go back

Return to home page

www.iraq-war.ru (en) RSS feed for articles and news

FOMC Minutes Lead to Massive Gains for Dollar

By , August 20, 2014 5:15 pm

A sheet of new hundred-dollar billsThe US dollar jumped today, rising to the highest level since April against the Great Britain pound and the Japanese yen, while also touching the strongest price in almost a year versus the euro. The reason for the stellar performance was the minutes of the latest Federal Reserve policy meeting.

The minutes of the meeting, which has happened at the end of July, turned out to be very bullish. The lines that caught traders’ attention were:

With respect to monetary policy over the medium run, participants generally agreed that labor market conditions and inflation had moved closer to the Committee’s longer-run objectives in recent months, and most anticipated that progress toward those goals would continue. Moreover, many participants noted that if convergence toward the Committee’s objectives occurred more quickly than expected, it might become appropriate to begin removing monetary policy accommodation sooner than they currently anticipated.

It looks like the imminent monetary tightening is closer than was considered previously. Such outlook allowed the dollar to gain against other currencies, including the sterling that was rising before the news.

EUR/USD sank from 1.3319 to 1.3259 as of 23:19 GMT today, reaching the lowest rate since September. GBP/USD declined from 1.6616 to 1.6597, retreating from the high of 1.6679. USD/JPY climbed from 102.90 to 103.69.

If you have any questions, comments or opinions regarding the US Dollar, feel free to post them using the commentary form below.

Forex News

Swissie Drops vs. Dollar, Gains vs. Euro

By , August 19, 2014 2:02 pm

Swiss coins on franc notesThe Swiss franc slumped along with the euro versus the US dollar today. The Swissie rose against the shared 18-nation currency itself but is slowly losing gains right now.

The performance of the Swiss currency was closely correlated to that of the euro since the Swiss National Bank introduced a cap on the franc three years ago. While central banks of some developed countries are planning to tighten their monetary policies, the European Central Bank maintains its easing bias. Most analysts believe that in such environment the SNB has no choice but maintain the currency ceiling for at least a year or two.

USD/CHF was up from 0.9063 to 0.9088 as of 19:36 GMT today. EUR/CHF dropped from 1.2113 to 1.2099 before trading at 1.2106.

If you have any questions, comments or opinions regarding the Swiss Franc, feel free to post them using the commentary form below.

Forex News