Dollar Jumps as Markets Fix on December Rate Expectations

The dollar surged to a three-month high and European and Asian stock markets dipped on Thursday as expectations hardened of the first rise in U.S. interest rates in almost a decade coming next month.

Federal Reserve chief Janet Yellen and two senior colleagues pointed to December as a “live possibility” for a rise, adding to signs that the U.S. central bank is again on the verge of moving after months of vacillating over the domestic and global economy’s ability to deal with higher borrowing costs.

An adverse reaction from global markets to September’s policy meeting put the Fed off raising rates when many had expected it to, but there have been some signs this time that investors have grown more sanguine about the likely fallout.

European stocks, after gaining initially on another batch of upbeat corporate results, were down 0.1-0.3 percent.


Craig Erlam
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the BBC and The Telegraph, and he also appears regularly as a guest commentator on Bloomberg TV, CNBC, FOX Business and BNN. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.