Forex Blog: Currency Trading News & Analysis.

March 22nd 2006

Bernanke signals additional rate hike

In a recent speech, Ben Bernanke, Chairman of the US Federal Reserve Bank, indicated the Fed would continue to raise interest rates in the near-term in order to rein in inflation. His words were supported by producer price data, which were released earlier in the day. The data suggested that prices of raw materials are rising, and, thus, the economy would benefit from additional rate hikes. For dollar bulls, this announcement provided a windfall, as the USD has become dependent on a wide interest rate differential to sustain the US current account deficit. The Wall Street Journal reports:

During the New York morning, the dollar…rebounded as the market factored that the core rate, which excludes volatile food and energy prices, rose more than expected. It climbed 0.3%, well above the 0.1% that economists had anticipated.

Read More: Dollar Posts Gains On Signs That Rates May Be Pushed Up

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Posted by Adam Kritzer | in Central Banks, US Dollar | No Comments »

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