Oct 13 (Lagos) - Dollar bullish investors were on the offensive on Wednesday as September’s hawkish FOMC meeting minutes reinforced expectations over a US interest rate rise before year-end.
Market participants were provided some clarity after the minutes showed September’s inaction being a “close call” with several members even agreeing that the Fed should raise rates in the near term if US data continued to strengthen. Bullish investors warmly welcomed the hawkish bias with the Dollar Index lurching towards 98.00 as optimism rose towards the central bank breaking its tradition of caution this year.
With US domestic data repeatedly displaying signs of stability and inflation slowing treading towards the golden 2% target, there seems to be a justifiable and compelling reason for the Fed to pull the trigger in the coming months.
A key talking point from September’s Fed minutes was the growing divergence within the committee, as several officials warned about the potential costs of keeping rates unchanged for prolonged periods.
Although the overall market reaction was somewhat muted, the minutes have displayed the Federal Reserve’s intentions to raise US rates this year, consequently providing the markets a cushion for the shock beforehand.
reporting for easykobo.com on Thursday, Oct 13 2016 from Lagos, Nigeria
Source - Written by Lukman Otunuga, Research Analyst at
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