European Markets Open Higher After Fed Hints At More Rate Hikes

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EU Indices Open Higher

Dollar Rallies

Yen Plummets


This week in a nutshell: Fed Points To More Rate Hikes

On Tuesday, the dollar edged lower, while the sterling and the euro jumped as expectations for an ECB and a BoE interest-rate hike rose. On Wednesday, the Federal Reserve did not raise its benchmark interest rate in a widely expected move, but policymakers indicated another hike is likely this year.*


Thu, September 21: In Today’s Markets…

1. European Markets Open Higher After Fed Hints At More Rate Hikes

European markets started the day higher on Thursday morning, with major indices like Germany’s DAX (GER_T30), UK’s FTSE 100 (GBR_100), France’s CAC 40 (FRA_40) and Europe’s Euro Stoxx 50 (EUR_50) edging higher across the charts. Investors will be focusing on a set of EU consumer confidence data due to be released at 2 p.m. GMT and ECB President Draghi’s speech at 13:30 GMT. It should be noted that if Draghi points to future rate hikes for the European Central Bank, in his speech this afternoon, the EUR is expected to edge higher.*


2. Dollar Rallies Against Major Rivals

The dollar climbed against its major rivals on Thursday, after the Federal Reserve signaled the possibility of an additional rate hike before the end of the year. As expected, the Fed left interest rates unchanged on Wednesday but signaled a possible interest rate hike by October. The EUR/USD (EURUSD) slipped to a one-week low following the announcement, while the USD/JPY (USDJPY) rallied to its highest since July.***


3. BOJ Keeps Rates At Record Lows, Yen Plummets

The Bank of Japan wrapped its two-day monetary policy meeting this morning maintaining key interest rates at their current record lows of -0.1% and signaling an upbeat outlook. The board majority opted for a solid recovery and aimed towards a 2% inflation target. The Japanese yen which was already trading lower against a robust dollar, dipped even further after the BOJ’s rate decision. It should be noted that the yen is also weakened thanks to widespread reports that Japanese Prime Minister Shinzo Abe is mulling an early election.***

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*Source: Reuters
***Source: CNBC

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