The U.S. Dollar maintained its steady rise against major currencies, as investors expect the Federal Reserve to hike interest rates by the year’s end to curb inflationary pressures on the economy. Ben Bernanke, the Federal Reserve president, continues to express his concerns about inflationary pressures on the economy, and on Tuesday, he cautioned about the effect of inflation on the weak U.S. Dollar.
Yesterday, the U.S. Dollar got support from better than expected U.S. jobs data, which showed a rise suggesting that the non-farm payroll data which will be released on Friday will also show a rise. However, some analysts caution that if the non-farm data shows a strong negative reading, the U.S. Dollar could come under pressure as investors will sell off the currency, even if for a quick profit taking, prior to the weekend.
Today, the European Central Bank will announce its decision about interest rates. The base rate is expected to remain unchanged at 4%. Investors will scrutinize the ECB press release carefully to gauge future directions of interest rates in the Euro zone.
The U.K. economy appears to be faltering, and as a result the Pound Sterling is under pressure. Housing prices, which were predicted to fall by 1% in May, actually fell by 2.4%.