US Dollar (USD) Exchange Rate Gaining After Yellen; Awaiting Friday Consumer Confidence Data
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Thursday has seen an influential day for the US Dollar by way of data publishing.
The US saw Building Permits data fall to -4.2%, despite forecasts to reach 3.0%, furthermore the Housing Starts data also disappointed failing to reach the predicted 1020K, only attaining 893K.
An expert in the field, Stuart Miller, stated: ‘The fundamental drivers of improvement in the housing market remain a steadily improving economy with a slowly improving employment picture unlocking pent-up demand while supplies remain constrained to meet that demand.’
However Miller continued to comment on the deficit of single and multifamily housing stating that this under-performance was: ‘likely to continue to define the housing markets for the foreseeable future and will drive the housing recovery forward.’
However optimism shrouds the US Dollar as Chairwoman for the Federal Reserve, Janet Yellen, has been speaking on both Tuesday and Wednesday, making her Semi-Annual testimonies which have supported the US Dollar.
With the US awaiting more specific details regarding interest rate hikes, Yellen stated that positive US unemployment data would fuel the rises.
Yellen commented: ‘If the committee continues to see improvement in the labour market and continues to forecast ongoing progress in the labour market, it is our intention to conclude after the October meeting. Beyond that we would maintain 0 to ¼ for the federal funds rates. As the economy makes further progress, we would begin to raise our targets for short term interest rates.’
Despite this, Yellen has made it very clear that the federal Reserve will not be boxed in to making a decision.
Yellen stated: ‘It would be a grave mistake for the Fed to commit to conduct monetary policy according to a mathematical rule. It is utterly necessary for us to provide more monetary-policy accommodation than those simple rules would have suggested.’
The US will see another significant day on Friday to end a highly influential week, with Consumer Confidence data released, currently forecast to rise to 83 from the former 82.5.
However the US Dollar looks as if it’s going to continue to gain with the backing of Yellen and the Federal Reserve, and the economy quelling unemployment levels.