The US dollar rose, but at low levels at the beginning of Friday\u2019s\nmorning sessions in the European stock exchanges. The greenback appears to be\nclosing at almost the same price as the week kicked off with, especially after\nthe speech by New York Federal Reserve Chairman John Williams, which has raised\nhopes of a major interest rate cut in the Fed\u2019s next policy meeting.<\/p>\n\n\n\n
“It’s better to take preventative measures than to wait\nfor disaster to unfold,” said the head of the Reserve at a central bank\nconference in New York. “When you only have so much stimulus at your\ndisposal, it pays to act quickly to lower rates at the first sign of economic\ndistress.”<\/p>\n\n\n\n
The comment renewed hopes that the Federal Reserve would cut\nFed interest rates by 50 basis points – instead of the more modest 25 basis\npoints – at the FOMC July 30-31 meeting . The speeches to be delivered later by\nEric Rosengren and James Bullard from the Federal Reserve will give further\nclues as to whether Williams’s view is the majority view.<\/p>\n\n\n\n
The comments dropped the dollar index, which measures the\nstrength and performance of the greenback against a basket of major market\nrivals, down about half a percent late on Thursday. However, it recovered in\nthe early morning hours to trade at 96.537 points.<\/p>\n\n\n\n
The prospect of an easier US monetary policy has given the\ncentral banks in emerging markets more confidence to cut interest rates without\nundermining their currencies. Indonesia, South Korea and South Africa cut their\nkey interest rates by 25 basis points on Thursday, but the Indian rupee reached\nits highest level in 15 months against the dollar, while the South African rand\nhit its highest level in seven months.<\/p>\n\n\n\n
In Europe, the Euro and Pound also benefited from Williams’\ncomments, with the British Pound able to rise above $1.25 again after touching\nits lowest level in two years below $1.24 earlier this week. Meanwhile, the\neuro rose to $1.1282, before falling to $1.1263, as German producer prices came\nin lower than expected in June, which reminded traders of the action the ECB\nneeds to take at its board meeting next week.<\/p>\n\n\n\n
Bloomberg said Thursday that the European Central Bank (ECB)\nhas begun to review how to set its inflation target, which could eventually\nlead to a more flexible monetary policy for a longer time.<\/p>\n","protected":false},"excerpt":{"rendered":"
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