5th August 2015
The US dollar was lifted on Wednesday, due to expectations that the Federal Reserve could raise interest rates from as early as next month.
Yesterday, Federal Reserve Bank of Atlanta president Dennis Lockhart hinted that the hike is indeed set to go ahead in the near future. As he is a voting member on the Fed’s monetary-policy committee, his opinion on the matter is of great interest to investors.
He told the Wall Street Journal that nothing short of "significant deterioration in the economic picture” would stand in the way of him voting in favour of the central bank raising short-term interest rates for the first time in a decade.
His comments sparked a dollar-buying frenzy on Tuesday afternoon, as Mr Lockhart sent a strong signal to investors that the Fed is drawing nearer to deciding to hike rents next month.
US two-year bond yields climbed 0.73%, marking its third-highest close for 2015 so far, helping to push the dollar higher.
On the back of this, the greenback gained 0.6 per cent against the euro and added 0.2 per cent versus the yen yesterday.
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