USD Strengthens after Fed Statements

The Federal Reserve is not as dovish as investors expected.

Economic News
26. Juni 2019

Today the financial markets are adjusting their attitude towards the Amercan dollar and the prospects of a quick, 50 basis points interest rate decrease by the Federal Reserve. This comes after statements from James Bullar, St. Louis Federal Reserve President, who said that this type of action would be too rash.

In addition, the Chairman of the Federal Reserve, Jerome Powell also shrugged off the idea that President Trump is trying to influence the central bank. Trump has been calling for a lower interest rate since the beginning of his Presidency, saying that the expensive dollar is hurting international trade. Powell said that any changes in the interest rate will be made on economic grounds, not politics.

Instead, the Federal Reserve plans to make a careful consideration of everything going on in the American economy and make only the slightest adjustments, if and when they are necessary.

As a result, traders are now less optimistic about a rate cut in the near future. This led to an increase in the value of the USD. The dollar index went up to 95.75. On the other hand, European and Asian stock markets marked losses.

Anna Sneider

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