Comments yesterday from St. Louis Federal Reserve President James Bullard were enough to send the dollar to five week highs after remarking that it was “prudent to raise rates off zero.” This immediately sent the US dollar higher against peers as an exit from bonds sent treasury yields soaring. Other relevant observations such as the idea that the “economy doesn’t need emergency policy setting anymore” combined with “asset prices not in bubble territory but it’s a risk” has raised the probability of a September hike above 50%. The dollar continues to make strides against the New Zealand dollar, Australian dollar, and Canadian dollar as anticipation of higher rates is seeing renewed interest in the relative safety of the dollar considering the continued accommodative monetary policies implemented in other developed economies.
Fed’s Bullard Sends Dollar Climbing
Daily Analysis - 21/07/2015