The US Dollar exchange rate looks set to make its biggest weekly gain in two months against a number of major peers as speculation among investor’s increases that the Federal Reserve could raise interest rates much sooner than expected.
The Dollar’s rise came after new Federal Reserve Chairman Janet Yellen suggested that rates will likely rise six months after the Central Banks quantitative easing programme ends. Economists are widely expecting the bond buying programme to end before the end of this year, suggesting that interest rates could rise early in 2015.
Also supporting the ‘Greenback’ was the publication of yesterday’s positive manufacturing data which dampened fears that the world’s largest economy is weakening.
Fitch Ratings also bolstered the Dollar by affirming US local and foreign credit ratings at AAA with a stable outlook. The company took the US off of a negative outlook.
Against the Australian Dollar the US currency fell as the ‘Aussie’ headed for a weekly gain. Against the Canadian Dollar the ‘Greenback’ weakened on the back of positive inflation and retail sales data.
Official data showed that consumer price inflation data in Canada rose by 0.7% last month, beating expectations for a rise of 0.5%, and added to January’s figure of 0.2%. A separate report showed that retail sales which excluded the sale of cars climbed by 1%, beating forecasts for a rise of 0.9%.
The EUR/USD exchange rate meanwhile remained close to a two-week low against the ‘Greenback’ after the single currency remained under pressure from comments made by a European Central Bank Executive Board member. Sabine Lautenschlaeger said on Thursday that rates will remain low or go even lower for an extended period.
The GBP/USD exchange rate drifted lower on Friday due to a lack of domestic UK data leaving the Pound vulnerable to international factors.
US Dollar (USD) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
US Dollar,
,Pound Sterling,0.6058 ,
US Dollar,,Euro,0.7244,
US Dollar,,Australian Dollar,1.1013 ,
US Dollar,,Canadian Dollar,1.1200,
Pound Sterling,,US Dollar,1.6502 ,
[/table]
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