020 7898 0500Not only have US stock markets set fresh record highs, we have seen oil prices push higher. The dollar (USD) has been strengthening as the prospect of a rate hike following the US Federal Reserve’s next meeting in early March increases. Two Federal Reserve officials used President’s Day to state that a hike in March is very much on the table. The markets are currently pricing in the chance of a hike at 25%. Consequently, the dollar has experienced its steepest gain against the euro (EUR) in more than a month.
Investors are waiting on further speeches today from Federal Reserve Presidents Patrick Harker and John Williams while Jerome Powell, Dennis Lockhart and Robert Kaplan take to the stand later in the week. If they continue the current theme, the dollar should continue to strengthen as the price of a potential hike continues to grow. Solid economic data and a rise in US inflation have led a number of Federal Reserve officials to believe a rate hike may be needed.
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