Fed kept the interest rate unchanged

Fully expected, at its last meeting, as head of the Fed, Yellen and the reserve kept interest rates in the US unchanged, paving the way for their further rise by her deputy. Most likely the next interest rate rise will be made by Jerome Powell in March.
The decision did not have a significant impact on the dollar trading levels, which, after its brief rise at the start of the week, again went down against the rest of the major currencies.
Later this week, Janet Yellen's mandate ends. She will be replaced by President Trump's nominee - Jerome Powell. The latter, also supports the policy of the reserve for a smooth increase in interest rates. Federal interest rates have been raised six times since the end of 2015.
In 2014, Janet Yellen became the first woman to become the head of the Fed. According to a number of magazines, she has even become the most influential woman in the world.

Decline for US indices yesterday

US indices dropped yesterday, with technology and energy companies struggling to dominate the market. The technological index dropped by 0.37% and the energy added 0.44% to its value.
Oil prices rose 1.5% to support energy companies. This happened after the US oil reserves fell in line with market participants' expectations.
Undoubted impact on the market was Yellen's speech at the University of New York. Yelan has suggested that the number of increases in interest rates in the coming year may be lower than expected.
The broad US index S&P 500 rose by about 16% this year. Yesterday the index failed to close above the psychological limit of 2,600 points.
Investors and analysts, however, are raising their expectations for index performance next year, with expectations for a two-digit rise in the index.
Traded volumes were minimal before Thanksgiving today and early closing on Friday. The Volatility Index (VIX) declined for the fifth trading session in a row, being close to its lowest levels for 23 years.
Technological companies were driven by a fall in Hewlett Packard Enterprise's stock of 7.8%, or their biggest decline since 2015. This happened after company manager Meg Whitman announced that she would step down from her post in February next year.

P. Harker: Another rate hike this year and three in the next

Fed Philadelphia head Patrick Harker said last week he expects another increase in interest from the reserve and three next year.
This program, however, will largely depend on the performance of inflation, Harker said.
He still signed up for three interest rates next year, but again we need to see how market dynamics is developing, Harker said in an interview with CNBC.
Apparently the comments of the official representatives of the reserve are not convincing enough, as yet a little over half of the market participants expect a third increase in interest rates this year.
We can not fail to note the still low performance of inflation in the world's leading economy. It is at levels below the target of 2%, puzzling seriously the members of the Monetary Policy Committee.
And although Fed officials, in the face of Janet Yelan and Stanley Fischer, have said in the past two weeks that they expect inflation to accelerate over the coming months as a result of low unemployment, inflation has fallen since the beginning year.

Fischer: Soon we will see inflation

The current path of low inflation in the US will not last long, according to Fed Vice President Stanley Fischer.
He still believes we will see higher inflation, Fischer said in an interview with Bloomberg TV.
The fall in unemployment will lead to an increase in wages at one point, and that is to inflation behind, Fischer said.
Fisher's comments are in line with statements by Janet Yelan, who recently said that she expects inflation to gradually rise over time.
Some Fed officials want to first see signs of returning inflation to target 2% before continuing the policy of raising interest rates.
Fischer said he welcomed the gradual rise in Fed interest rates since 2015.
Currently, the level of short-term US interest rates is between 1 and 1.25%. Inflation measured through personal consumption is at a level of 1.3% on an annual basis.

Yellen: The gradual rise in interest rates will continue (2)

Yellen's comments are becoming reality in an environment of fierce disputes among economists and members of the monetary policy committee about how the rise in interest rates will affect on low inflation.
The level of consumer price growth is still far below the target of 2%, which is considered healthy for the economy.
According to Yellen, there is now a 30% probability that inflation will fluctuate between one and three percent, which could radically change the policy pursued by the reserve.
In fact, Yellen's message was very controversial, but was perceived by market participants as a complete lack of certainty as to what Fed's interest rate inflation and policy would be.

Yellen: The gradual rise in interest rates will continue (1)

Janet Yellen did not surprise the market by saying what everyone was expecting from her. Particulary, the gradual rise in interest rates will continue despite weak inflation.
Yellen's comments continue to indicate problems in predicting inflation in the future, which may be an obstacle to normalizing interest rate policy from the Federal reserve.
It is possible that the Fed has applied incorrect inflation models and failed to take into account key labor market facts, said Yellen.
And while there is still no clear evidence of accelerating inflation to strengthen the position of a gradual rise in interest rates, the central bank must be open to similar action, the most influential business lady said.
The current low inflation most likely reflects factors that will drop over time, Yellen said in a 37-page report.
Without further gradual increases in federal interest, according to her, over time, there is a risk that the labor market will gradually overheat, creating inflationary problems in the future that will be difficult to overcome without bringing a recession.

The head of the US Federal Reserve called "appropriate" the rate hike in March

The US Federal Reserve may raise interest rates later in March if the economic data about the state of the labor market and inflation will continue to remain at an acceptable level, said Fed chief Janet Yellen on Friday, indicating a likely imminent increase at the next meeting of the regulator.
Some of Yellen colleagues at the US central bank in recent days talked about the possibility of a rate hike at the meeting of 14-15 March.
The head of the regulator noted that this year's rate increase will be faster, because the economy this year for the first time since Yellen's FED presidency will not get any unavoidable complexity, either domestically or abroad.
Overall, the prospects for moderate economic growth are encouraging, partly due to a decrease in outbound from abroad risk, according to Yellen.
The target of the Fed about unemployment is reached and rising of prices revived.
The last time the Fed raised rates was in December, signaling of another three possible hikes in 2017.

The dollar strengthened after the speech of Yellen

Dollar strengthend its position in the course of trading on Friday after the governor of the Federal Reserve Janet Yellen said, that the likelihood of interest rates hike has increased, though not pointed at the approaching of tightening of monetary policy.
The US currency rose after the speech of Yellen, but then turned down, as investors analyzed some of the details of a more peaceful character.
Speaking at a conference of representatives of the world's central bankers in Jackson Hole, Wyoming, Yellen said, that the probability of a Fed rate hike has increased in recent months in connection with improvements in the labor market and the prospects for accelerated economic growth.
The US Commerce Department reported on Friday, that the country's economy in the second quarter of 2016 expanded at a slower pace than previously thought. US GDP grew by 1.1 percent over the same period of 2015, according to revised data. Meanwhile, consumer spending, which make up more than two-thirds of the index of economic activity, showed the strongest growth since the fourth quarter of 2014.

USD/CAD rising in anticipation of Yellen speech

On Wednesday, the US dollar was higher against the Canadian dollar, as investors are waiting for the speech of Federal Reserve Chairman Janet Yellen on Friday.
At the beginning of the US trade, the pair USD/CAD reached 1.2953, the session high; the pair subsequently consolidated at 1.2932, adding 0.16%.
The pair was likely to find support at 1.2854, Tuesday's low, and resistance at 1.2997, the high of August 12.
Market participants are waiting for the outlook of Yellen's on US economy, after the hawkish comments of other Fed officials in recent weeks and release of protocols of the July meeting of the Federal Committee, which showed that its members still disagree on the need to raise rates this year.
The US dollar was supported after data on Tuesday showed, that the volume of new home sales jumped by 12.4% to 654,000 last month, although the forecasts were for decline by 2.0%.
Investors remain cautious on the eve of speech of the Chairman of the Federal Reserve Janet Yellen on Friday.
At the same time the Canadian dollar remaind under pressure from falling of oil prices on Wednesday.
Canadian dollar rose against the euro, EUR/CAD fell by 0.18% to 1.4572.

RBS: We did not expected raise rates by the Fed this year before, we do not expect it now

The published report from the meeting of the FOMC in July turned out to be less combative than market expectations. Committee members were divided on the need to continue raising interest rates. However, we should keep in mind, that the head of the Fed, Janet Yellen, is one of the most "pacifist" members of the FOMC.
Thus analysts of the bank remain of the view, that the Fed has no reason to hurry to increase interest rates and this move looks very unlikely in September.
Although recent US economic data are very encouraging, obstacle to continued tightening of monetary policy is the lack of sustained inflation. The increase in interest rates in December is still possible, but analysts of the bank are skeptical that it will happen even then.

Dollar fears Yellen's pessimism

The dollar has decided to take a break and is trading lower against its major rivals. Judging by the current dynamics of the American currency, at this stage the market played a recent "hawk" messages from Fed's and switched to upcoming events. Tomorrow the US will publish a report on GDP in the first quarter, and later will be the speech of the Fed's governor Janet Yellen. To some extent, today's dollar sales are related to the expectations of these events, and with particular caution players are preparing for the speech of the head of the American regulator.

J. Yellen, renowned for her caution and commitment to the "pigeon" rhetoric, can partially reverse the recently resurgent optimism of market participants in relation to the imminent rate hike. If the head of the bank will continue to adhere to such a tone, the dollar could make a downward correction against other major currencies. In anticipation of Yellen's speach, the dollar can demonstrate a consolidation with a downward bias.