The value of the US dollar recently hit higher than euro and yen on Friday, September 12. Investors expect that the Federal Reserve may have to increase rates in 2015 since the United States is drastically improving in the economic data.
The economic status of the United States is on its development stage yet there are slacks that needs to be taken into account according to Scott Brown, Raymond James' chief economist.
Additionally, debt in the US Treasury also increased making the dollar an appealing investment. US borrowing may now cost higher as the worldwide currency markets made an enormous progress resulting some stock markets to back off. After 5 weeks of continuous gains, US finished lower. Chief technical strategist of Delta Global, Bruce Zaro said that investors only look at the inevitable raise and it does not matter if this starts now or later.
The US currency reached its highest gauge in a streak of 14 months yielding up to .1% per 107.33 yen - the highest yield ever recorded since September of 2008.
It seems that the US trade is on its tripping point whereas the US interest rate and the value of dollar is more likely to increase in 2015, stated by Bank of New York Mellon's Simon Derreck.
The Federal Reserve's projected data as compiled by Bloomberg shows that there is an ultimate chance that the United States will increase its toll even raising interest rates for overnight loans between banks. As compared to the recent rate of 73% since December of 2008, the targeted yield is ranged from 0-0.25%.
Kirk Hartman of Wells Capital Management says that there is nothing wrong with the Fed's decision to raise the bar since it is also expected that the dollar would continue to go up.