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Wednesday, 12 October 2016

A trend in the growth of the dollar without odd noise

Yesterday was not generous in macroeconomic statistics, so market participants continued to move within formed trend of the last week, buying the dollar on expectations of a rate hike at the end of the year. While economists and Fed officials have long pointed out this option as primary, markets almost did not believe in such a possibility. Thus, in the coming weeks and months, we may be witnessing a new wave of raise in the dollar.
It may well turn into the formed movement from July 2014 to March 2015, when the markets began to seriously consider the possibility of rate hikes in the US and laid on a sharp slope of the yield curve. Now there is such a change in the slope of the curve.
But this movement may not be as dramatic and become merely a repetition of the situation from late last year. Then the dollar index gained 7% since the publication of FOMC protocols in October to the actual increase in December. However, later the dollar was not under force to grow, since the fall of emerging stock markets and raw materials has forced the Fed to rethink their plans for the rates.
During the year, the US economy hasn't become more stable, employers are not rushed to hire new staff and raise salaries significantly, and consumers - to spend. Almost exactly the same repeats the trend for oil: it raised from August to mid-October, after the dollar.
The situation may be repeated this year, and in the accuracy: on Wednesday FOMC minutes will be published, which, like the previous year, can make markets increase the likelihood of a December increase from 60 to 100 percent.

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