The US dollar jumped on Wednesday and retained it gains today after Federal Reserve Chairwoman Janet Yellen confirmed the possibility of an interest rate hike in December. US economic data was also supportive for the greenback.
Yellen was testifying on Wednesday in her first public speech since the last week’s policy announcement from the Fed. She said:
If the incoming information supports that expectation then our statement indicates that December would be a live possibility.
But the Chairwoman also emphasized:
Importantly, we’ve made no decision about it.
US economic reports released over Wednesday were positive for the most part, including the one that showed robust employment growth, supporting the case for monetary tightening. As a result, the probability of a December interest rate hike (as shown by the CME FedWatch) climbed to 56 percent.
EUR/USD sank from 1.0961 to 1.0865 yesterday and traded at 1.0868 as of 2:55 GMT today. GBP/USD traded at about 1.5380 after falling from 1.5420 to 1.5383. USD/JPY rallied from 121.05 to 121.56 during the previous trading session before retreating to 121.43 during the current session.
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