USD/JPY: It is Expected that the Interest Rates in the USA will be Raised
It seems the USD has grown due to the verbal support provided by US Fed representatives. President of the US Fed in St. Louis Mr. James Bullard said in the interview to Bloomberg Television last Thursday that the rise in the interest rate can be justified on the grounds of the last events. It means that the US fed may increase the rate in April. After the words by Mr. Bullard the USD rose all over the market. Increasing expectations of the interest rate rise in case of the positive US macro-economic data will support the USD this week and during the end of the month.
US GDP has been revised upward (from 1.0 to 1.4%) last Friday and this news indicated stability of the economic development in the USA.
As a result, since the beginning of the trading session this Monday, the stock index Nikkei Stock Average and the pair USD/JPY have grown.
Note that amid expectation of the rise in the interest rate in the USA the price of gold fell in Asia. Spot-price of gold fell by 0.5% to 1211.11 USD per ounce.
Some important US and Japanese news will become known this week. On Tuesday at в 01:30, 01:50 (GMT+2), inflation rate and unemployment rate in Japan for February will be released. On Friday at 01:50 – Tankan index of the Bank of Japan on the key sectors of economy for Q1 will become known. On Friday, market participants’ attention will be focused on the US Non-Farm PayRolls for March. According to the forecast the index will show +205 000 new jobs against +242 000 in February and on unemployment rate in the USA will be released at 4:30 (GMT+2). Later, at 15:45 and 16:00 PMI Markit in the manufacturing sector will be released, as well as business activity ISM in the US manufacturing sector for March.
Positive data will increase market participants’ expectations of the increase in the interest rate in the USA and support the rise in the USD. Negative data will cause the fall in the USD.
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