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The Dollar Pushes On Further and Higher

October 10, 2014 0 Comments

‘Beware of the strong dollar’: this is the key message of ‘minutes’ published yesterday by the Federal Reserve. Consequently, the single European currency continues to recover against the greenback American this afternoon, still earning 0.20% to 1.2757 dollar. One to compare to the annual low of 1.2501 reached on October 3.

Expected with little hope for investors, ‘minutes’, that is to say the minutes of the last meeting of the Monetary Policy Committee of the Fed, the FOMC meeting on 16 and 17 September last, finally detonated. “The Fed can still surprise the markets and investors’ comment this morning analysts at Aurel BGC.

‘The main surprise in these minutes is a perception by many members of the FOMC, risk of a slowing economy and a too rapid appreciation of the dollar. During his press conference after the meeting, Ms. Yellen did not raise these internal debates within Member ‘last September, say the experts.

Therefore, expectations as to the date the Fed will report its key rate, somewhere in the first half of 2015 according to the consensus tend to drift over time. “The dollar lost ground against its major counterparts pushed by the possibility of continuation of Fed rate longer than expected and would do nothing without the belief of a stable economic recovery,” says RTFX.

‘We had the impression that the recovery of the dollar was too late, but we have not drawn the consequences’, blame themselves this morning traders of Societe Generale.

“Traders have since opted for some profit taking on the dollar, allowing the euro to try to regain some” nuance their side analysts Saxo Bank. Since the beginning of the year, the European single currency lost 7.3% of its value against its American counterpart.

The statistical side, we learned this morning that the trade deficit of France had increased, from € -5.5 billion in July to -5.8 billion in August, while the trade surplus Germany shrank from 22.2 to 17.5 billion one month to the next.

Still on the economic news, exchange operators will learn the latest decisions of the Bank of England, and enrollment in unemployment benefits and wholesale inventories in the United States.

Filed in: US Dollar Forecast

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