Dollar surges after Fed statement; September hike now widely expected

Dollar surges after Fed statement; September hike now widely expected

30 July 2015, 08:57
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On Thursday the dollar rose against the yen and the euro during Asian trade, inspired by what investors interpreted as a slightly hawkish statement from the Federal Reserve in deciding when to lift short term rates.

The greenback jumped to ¥124.19, its highest since July 21, compared with ¥123.94 late Wednesday in New York.

It was also higher against the euro, which fell to $1.0956 midday from $1.0986 in New York overnight.

The stock market’s strong performance in Asia also encouraged market sentiment to help the dollar rise in the morning session.

The Federal Open Market Committee on Wednesday left its benchmark short-term interest rate near zero, but provided several cues that it is close to seeing enough improvement in the job market to prompt officials to increase the rate as early as September.

For months, policy makers have been saying they desired to see “additional improvement in the labor market” before deciding it is time to raise rates.

In Wednesday’s statement they said they wanted to see “some” additional improvement, suggesting they see themselves nearing their threshold on the jobs front for action.

The Shanghai Composite was last trading down 0.36%, while Japan’s Nikkei Stock Average was up 1.04% at midday.

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