The US Dollar ended its rise against the Euro, as the ECB had several officials speak out in predicting future rate hikes. It is unclear if the ECB is planning a single increase (likely in July), or a series of hikes, as the officials volunteered differing opinions on the subject.
One continuing storyline is how markets worldwide are responding to central banks’ suddenly hawkish tones. Interest rate hikes have already occurred in countries such as India and Denmark, and larger players such as the ECB and the Fed are sounding like they may also raise rates in the near future. Some economists, such as Harvard’s Martin Feldstein, are worried about the possibility of minor stagflation arising from these policies.
In other news, the Swiss has rallied against the USD and the euro. Crude Oil futures are up almost 5%, and Bernanke cautioned that further price pressures could cause problems for the entire world.
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Posted: June 11th, 2008 under Currency, Economics, Forex Trading.
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