American focus: speculation on continuation U.S. rate growth support USD [E]

Growing fears Fed with the purpose of struggle against inflation will continue to increase interest rates became the reason of the U.S. currency strengthening. The dollar rose to an eight-week high against the yen and climbed versus the euro after Fed Bank of Atlanta President Jack Guynn today said core inflation is beyond the “acceptable range”.

Futures at Fed interest rates Federal Funds 25 years диаграмма consider 100% probability of rate increase on 25 b.p. to 5.25% on June 29. The possibility of next rate’s growth in August rose to 75% against 67% in end of the previous week.

Inflation risks are “elevated,” Guynn said today at the meeting of Georgia Bankers Association.

Friday’s report Michigan sent. Index диаграмма testified that for the first time since March of current year American buyers optimism gained.

Before that Labor Department informed CPI during for 3 months successively exceeded forecast value: CPI m/m диаграмма, CPI core диаграмма.

“Fed officials may signal the economy is robust enough to keep raising interest rates to contain inflation,” said Mamoru Ashimoto, deputy general manager of Shinsei Bank Ltd. “This will boost the dollar.”

Therefore, main factors of the U.S. currency support remain expectations of interest rates increase and better-than-feared economic.

“The trend is for a stronger dollar,'' said Adnan Akant, head of foreign exchange in New York at money manager Fischer Francis Trees & Watts, with $37 billion in assets.

Trades opened with increase owning to positive corporate news and oil prices decrease, major indexes fell to negative area after Jack Guynn speech about inflation and now remain under pressure. Trades in stock market will be defined by economic factors because of economic news absence today.