US Dollar strenthens as Yen hits record lows against EuroYesterday the GBP lost ground against the USD and Euro after the minutes from
Yesterday the Pound lost ground against the US Dollar and Euro after the minutes from the Bank of England’s February Monetary Policy Committee meeting revealed a 7 to 2 vote in favour of keeping UK interest rates on hold at 5.25 per cent.
The seven members that voted for a rate hold felt concerned about delivering rate hikes that were too closely spaced together. They wanted to give the economy time to absorb the latest rate hikes and also wanted to avoid over tightening.
The minutes gave no clues on the timing of the next UK interest rate rise. However, the tone of the discussion was significantly more hawkish than that of the December MPC minutes, which preceded January’s surprise rate rise.
In the US consumer prices were slightly better than expected yesterday which helped to contribute to the overall strength of the USD. Having rallied going into the release of the CPI report, the true impact on the dollar was limited.
The minutes from the January FOMC meeting were relatively upbeat about growth and agreed that inflation risks still remain. Even though another rate hike was not justified at the time, they decided against dropping the tightening bias.
The tone of the statement contained the same degree of hawkishness as the comments made by Fed Chairman Bernanke last week, which should keep the prospects of a rate hike later this year in play.
The Yen tumbled to a record low against the Euro yesterday and lost ground against other major currencies as the Bank of Japan’s decision to raise interest rates failed to boost the currency. The BoJ voted 8-to-1 in favour of raising increasing interest rates by 25 basis points to 0.5 %.
Comments from the BoJ reinforced the market’s belief that despite the increase, interest rates will remain low and any further rate hikes will be delivered gradually.
The contents of this blog are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. The Wise Money Blog cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.
The seven members that voted for a rate hold felt concerned about delivering rate hikes that were too closely spaced together. They wanted to give the economy time to absorb the latest rate hikes and also wanted to avoid over tightening.
The minutes gave no clues on the timing of the next UK interest rate rise. However, the tone of the discussion was significantly more hawkish than that of the December MPC minutes, which preceded January’s surprise rate rise.
In the US consumer prices were slightly better than expected yesterday which helped to contribute to the overall strength of the USD. Having rallied going into the release of the CPI report, the true impact on the dollar was limited.
The minutes from the January FOMC meeting were relatively upbeat about growth and agreed that inflation risks still remain. Even though another rate hike was not justified at the time, they decided against dropping the tightening bias.
The tone of the statement contained the same degree of hawkishness as the comments made by Fed Chairman Bernanke last week, which should keep the prospects of a rate hike later this year in play.
The Yen tumbled to a record low against the Euro yesterday and lost ground against other major currencies as the Bank of Japan’s decision to raise interest rates failed to boost the currency. The BoJ voted 8-to-1 in favour of raising increasing interest rates by 25 basis points to 0.5 %.
Comments from the BoJ reinforced the market’s belief that despite the increase, interest rates will remain low and any further rate hikes will be delivered gradually.
The contents of this blog are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. The Wise Money Blog cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.
posted by Drs Search @ 2:17 PM
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