Dollar tumbles as Fed implies sustained zero interest rate
June 19, 2014 9:46 am
The US dollar remained lower as the Federal Reserve implied it would maintain interest rates close to zero although it concludes bond purchases.
A Deutsche Bank AG measure of currency market volatility dropped by the most in more than a week following Fed Chair Janet Yellen said the Fed expected rates to stay low for a considerable time after ending monthly debt purchases, which were cut to $35 billion.
“Yellen basically said recent data haven’t been enough to confirm a pickup in the economic recovery. Investors expect accommodative policy to continue for some time, meaning a weak dollar and strength in high-yielding currencies,” said Ken Takahashi, Assistant Vice President for Global Markets at Sumitomo Mitsui Trust Bank Ltd.
The greenback bought ¥101.90 after it fell 0.2% to ¥101.93 yesterday. It was slightly changed at $1.3589 per euro after it slid 0.4% in New York.
Fed officials postulated their target interest rate would be 1.13% at the end of 2015 and 2.5% a year after, higher than previously predicted. They trimmed their long-run estimated rate to 3.75% from 4%, showing slower long-term growth for the world’s largest economy.
The material has been provided by InstaForex Company – www.instaforex.com
The US dollar remained lower as the Federal Reserve implied it would maintain interest rates close to zero although it concludes bond purchases.
A Deutsche Bank AG measure of currency market volatility dropped by the most in more than a week following Fed Chair Janet Yellen said the Fed expected rates to stay low for a considerable time after ending monthly debt purchases, which were cut to $35 billion.
“Yellen basically said recent data haven’t been enough to confirm a pickup in the economic recovery. Investors expect accommodative policy to continue for some time, meaning a weak dollar and strength in high-yielding currencies,” said Ken Takahashi, Assistant Vice President for Global Markets at Sumitomo Mitsui Trust Bank Ltd.
The greenback bought ¥101.90 after it fell 0.2% to ¥101.93 yesterday. It was slightly changed at $1.3589 per euro after it slid 0.4% in New York.
Fed officials postulated their target interest rate would be 1.13% at the end of 2015 and 2.5% a year after, higher than previously predicted. They trimmed their long-run estimated rate to 3.75% from 4%, showing slower long-term growth for the world’s largest economy.
The material has been provided by InstaForex Company – www.instaforex.com
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