Federal Reserve Expected to Boost US Rates in August
US dollar forex trading forecastOne of the indicators in currency trading on the FX market is interest rates. And right now, the US dollar forex trading forecast expects that the Federal Reserve will raise US rates in August. Calculated Risk reports on the expected hike to US rates:
However, according to a private calculation (using the August Fed Funds future contract), the odds of a 25 bps rate hike increased to by 70% today!
Raising rates with unemployment rising, and the economic risks to the downside, seems very strange - but that is what the market expects.
Because the expectation is unorthodox, the expectation of a hike to US rates is actually hurting, rather than helping, the US dollar in forex trading right now.
See Also
- US Dollar Forex Trading
Currency trading on the FX market
Original post by Eric J. Fox