The USD records a 13 month low against a basket of currencies on Tuesday as the 10 year US bond yield fell, ahead of the Federal Reserve’s two day meeting to discuss monetary policies appropriate to economic growth in the country. The USD later in the day released important data on levels of consumer confidence in the economy during July.
The USD index fell by 93.63 points to 93.63 points from the opening level of 93.86 points and recorded the highest level of 93.89 points and the lowest level of 93.62 points since June 23, 2016.
The index ended yesterday’s trading up by less than 0.1 percent, its first gain in three days, supported by government data showing the growth of the manufacturing sector in the United States in July.
The 10 year yield on US 10 year bonds fell to a 2.25 percent basis, and the yield fell by about 15 basis points over the last two weeks, after the prospect of accelerating US monetary tightening slowed.
The Federal Open Market Committee opens its weekly meeting to discuss monetary policy appropriate to developments in the US economy, and will issue decisions on Wednesday, amid expectations of keeping interest rates unchanged without a change of 1.25%.
The Committee raised interest rates twice during the March and June meetings and confirmed confidence in the country’s economic growth path and pointed to a third time price hike this year amidst the strength of the labor market, The country has a temporary look.
United States interest rate hikes in December fell below 50 percent, especially after Janet Yellen’s comments to Congress, after data showed that inflation levels remained weak in the United States.
Janet Yellen said the economy was strong enough to continue to tighten monetary policy gradually, and indicated that the implementation of interest rate plans would proceed, with a slow reduction in the Federal Reserve’s balance sheet this year.
Yelen stressed that weak inflation in the country and a low neutral interest rate may not leave room for monetary policy makers to move towards faster rate hikes.
The United States economy is expected to release the CB consumer confidence index in July to 116.5 from 118.9 in June.