Aug 29 (Lagos) - Sentiment towards the US economy was elevated on Friday following the hawkish comments from Janet Yellen which bolstered expectations over the Federal Reserve raising US rates in 2016. Investors were gifted the clarity long sought when Yellen suggested that the case for raising US rates had strengthened in recent months consequently uplifting the Dollar.
For an extended period, domestic data from the States has followed a positive path while the easing Brexit anxieties continue to provide some leeway for the central bank to take action. While there have been ongoing talks of September being a live meeting to raise US rates, it seems likely that the Fed waits for further positive domestic data to justify raising US interest rates in December.
With the Jackson Hole meeting dispelling the period of uncertainty, the Dollar could trade higher as bets mount over the Fed breaking this tradition of central bank caution. Focus may be directed towards the pending all-important U.S non-farm payrolls report this week which if exceeds expectations could provide another compelling reason for the Fed to act.
The Dollar Index surged with ferocity on Friday following Yellen’s comments which renewed hopes of the Fed pushing the button. Although prices are currently in the boundaries of still being bearish on the daily time frame, a breakout above 96.00 could entice bulls to send prices higher.
reporting for easykobo.com on Monday, Aug 29 2016 from Lagos, Nigeria
Source - Written by Lukman Otunuga, Research Analyst at FXTM
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