American focus: USD closes week with gains.[E]

On Friday the dollar continue lift and climbed to an eight-week high against the euro on increasing speculation the Federal Reserve will raise interest rates at least twice more this year.

The reason for such USD rally remain Fed representatives speech hinting Fed worry on current inflation data which has already overflow the «comfort level».

More is that some analysts predict that Fed can boost it's key rates on 50 b.p. by next week. The possibility of such rates hike estimates now in 12%. The same time interest-rate futures show traders fully priced of key rates move on 25 b.p. at June 29. There's an 83% chance of another quarter-point rate boost in August. Remind that prior week estimated such possibility in 67%. Ultimately, the market focus will again be directed on deferential gap between EU and US rates.

Issued today data on Durable goods orders ex. transport in May showed data increase the third months and indicates the economy can withstand higher rates. Thus Fed do not see any hedges for further monetary policy tightening to curb inflation risks. A proceeding falling in the stock markets of the developing economy countries also supported USD which now plays a role of save heaven currency. Recently investors are lured to buy USD.'' said Daniel Janis, Strategic Income Fund. Investors believe the Fed may be more aggressive than anticipated."