Fed announce interest rate rise
17 December, 2015
Last night saw the expected result for the FED in the US to raise interest rates which has ended a near decade low. The US interest rate have been near to 0% for the past 7 years and last night was increased by 0.25% to 0.5% but the Fed’s Governor Janet Yellen also hinted in further interest rates in 2016. The decision by the Fed’s rate-setting committee was unanimous. The Committee feel that the action had been taken as they judge the US economy is in a healthy position to be weaned off life support of low rates that has aided to the recovery. Janet Yellen was outlining why the rate rise was feasible, the unemployment rate was down to 5% and US real gross domestic product increased to an average pace to 2.25%. Yellen also added “with gradual adjustment economic activity will continue to expand at a moderate pace and labour market indicators will continue to strengthen” which hints at more potential rises in the future should this to go to plan.
Although this was a massive decision from the US and was very good news for the Dollar it didn’t bring any movements to the currency market as this move has been anticipated. Over the last month and we have seen the dollar strengthen due to this interest rate being reported and with the outcome broadcast last night did not strengthen the dollar further as this had already been priced into the market over the past few weeks.
Today there are a few data releases to note. At 9.00am the European Central Bank announce the monthly bulletin which is published two weeks after each governing council meeting. At 9.30am the UK release Retail sales figures and is expected to record a negative figure from its previous 3.0% to 2.3% which could see the pound drop off slightly to its currency competitors and at 15.00pm data comes from the US with the Conference board leading indicator.
As always stay in close contact with you account manager here at Currency Index to stay ahead of market movements from today data releases.
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