Pure FX Blog

10 January 2018

US Dollar Nears 2-Week High Versus Euro, as Fed Officials Signal Hikes

The US dollar to euro interbank exchange rate has hit 0.8386 today, close to its highest since December 28th, as Federal Reserve officials have signalled that they will repeatedly lift US interest rates this year. Image credit: Benjamin Earwicker.

The US dollar to euro interbank exchange rate has hit 0.8386 today, close to its highest since December 28th, as Federal Reserve officials have signalled that they will repeatedly lift US interest rates this year. Image credit: Benjamin Earwicker.

by Peter Lavelle

Welcome to Pure FX’s latest update of the US dollar to euro interbank exchange rate.

This tells you when it’s a favourable time to exchange US dollars to euros, for your money transfer!

The greenback takes the lead versus the common currency! The US dollar to euro interbank exchange rate has hit 0.8386 today, close to its highest in 2 weeks, or since December 28th.

The US dollar has jumped, because a member of America’s central bank, the Federal Reserve, said recently that the Fed may lift US interest rates 4 times this year, above market forecasts.

The buck has risen, because Cleveland Fed president Loretta Mester told CNBC last Friday that “I probably have one more (hike)”, above market forecasts for 3 interest rate hikes in 2018.

What’s more, Mrs. Mester added that “I think we’re basically at maximum employment from the view of monetary policy” in the USA, thereby lifting the greenback versus the euro too.

This has lifted the US dollar, because if the Federal Reserve lifts interest rates 4 times this year, rather than just 3, this will boost investors’ returns for placing money in the USA!

US dollar shoots up, as Williams signals interest rate hikes too

Moreover, the US dollar has also neared this 2-week high against the euro, because San Francisco Fed President John Williams also said recently that the Fed will lift interest rates in 2018.

The greenback has climbed, because speaking on Saturday at the American Economic Association conference, Mr. Williams said that “Something like three rate hikes makes sense to me.”

Also, Mr. Williams added that “We’re in a pretty good situation: the economy is doing great”, and that he expects US unemployment to fall -0.4% in 2018, to just 3.7%, thus lifting the buck too.

This has boosted the US dollar, first because Mr. Williams’ comments have reassured markets that the Federal Reserve will lift interest rates at least 3 times in 2018, above 1.25-1.5%.

This has also strengthened the greenback, because Mr. Williams’ remarks suggest that the US economy will continue to strengthen this year, with joblessness falling even further.

With all this in mind, the US dollar to euro interbank exchange rate has neared this 2-week high today!

Get a free US dollar to euro exchange rate quote

Get a free US dollar to euro exchange rate quote to get our best exchange rate, and find out how much you could save with Pure FX.

You’ll get an outstanding US dollar to euro exchange rate for your money transfer!

Please bear in mind, this article is Pure FX’s opinion only and does not constitute advice. Moreover, the exchange rates referred to in this article are the interbank rates, which are the rates at which banks and financial institutions buy and sell currency to each other. Therefore these exchange rates cannot be accessed by individuals or SMEs, and are not the same rates that Pure FX can offer. To get a free exchange rate quote, call us on +44 (0) 1494 671800, or email peter.lavelle@purefx.co.uk.

This entry was posted in Market Commentary, What's The Best Time to Exchange Currencies? and tagged , , , , , , , , . Bookmark the permalink.

Comments are closed.

Follow us on Facebook
Follow us on Twitter