In the wake of last week’s comments from the head of the US Federal Reserve Bank while at the Jackson Holy symposium, the US Dollar was broadly higher on a brighter outlook for the US economy and a subsequent interest rate hike. Though she failed to talk about timing, Ms. Yellen pointed out that both the economy and the labor situation in the US had improved over the last several months, paving the way for a rate increase. Stanley Fischer, the Vice Chairperson of the Fed, said, however, that her Ms. Yellen’s outlook was consistent with a possible 2016 rate adjustment.
As reported at 10:49 am (BST) in London, the EUR/USD was trading at $1.185, down 0.09%; the pair has ranged from $1.171 to $1.207 in today’s trade. The GBP/USD was lower, too, trading at $1.3105, down 0.24%; earlier the pair had hit a low of $1.3084.
US Labor Data Could Drive Decision
Any uncertainty over the possibility of a US rate hike is likely to be diminished after the release of the upcoming labor data. On Friday, the US Labor department will issue its report on non-farms payroll figures, and any improvement in figures could push the Dollar firmly and broadly higher. At present, the consensus is calling for 180K new jobs in August, with a drop in the unemployment rate to 4.8%.