Interest Rate Hike Bets Continue to Support Dollar

The US dollar continued to move upward with the help of speculations about an eventual increase of interest rates by the Federal Reserve. The greenback reached the strongest rate in six years versus the Japanese yen. Surprisingly enough, the currency dipped versus the Great Britain pound, which was unexpectedly strong at today’s trading session.
Forex market participants continue to speculate about possible timing of Fed’s interest rate hike. The general consensus is that the US central bank will drop its asset purchase program in October and will start monetary tightening in mid-2015. With relatively uneventful week in terms of economic data from the United States, there is little to change this outlook in one way or the other.
The next Fed policy meeting is scheduled on September 17. It should be an important event as it will be accompanied by press-conference and economic projections.
EUR/USD ticked down from 1.2939 to 1.2922 as of 23:13 GMT today. USD/JPY soared from 106.19 to 106.86, touching the highest level since September 2008. At the same time, GBP/USD advanced from 1.6104 to 1.6203, bouncing from the low of 1.6052 — the weakest rate since November 15.

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