FOMC member Harker talked about the option of raising rates in March. He joins a growing chorus of Federal Reserve officials that do not rule a Spring hike, with some supporting this option with a full throat.
Fed Chair Janet Yellen did not really provide a clear hint about March but left the door open. She talked about raising rates in one of the “upcoming meeting”. The upbeat tone raised the chances but the use of the plural version meant that a hike in March and a faster rate of rate rises is not really on the table.
In any case, the US dollar is now on the rise, with EUR/USD dropped off 1.06 once again and finding some support around 1.0570. Much stronger support awaits at 1.0520. Resistance is at 1.0690.
The US dollar is also gaining ground against the Japanese yen, with USD/JPY rising towards 113.50. GBP/USD is down to 1.2423.
Is the current greenback comeback only related to Harker’s comments? Certainly not. It is also important to remember that US traders were on holiday and are now coming back online. Their return means that trading volume is rising. The US dollar strengthened on Friday, recovering from failures to advance on good news.
We might be seeing an extension of those Friday moves.
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