Fed may give a surprise today - ANALYSIS

US decision will significantly affect the exchange rate of Azerbaijani manat

Baku. 21 September. REPORT.AZ/ Following the Central Bank of Japan ( BOJ), Federal Reserve Service (FRS) may give a surprise to markets.

Analytical Group of Report believes, contrary to forecasts, Fed has good reason to raise interest rates.

While the 10-year US bonds remain in their local maxima remain in their local maxima two-year, treasury notes are sensitive to changes in interest rates show an upward trend. This suggests that the surprise will happen and Fed will raise interest rates.

The most likely interest rates will increase by 0.25%, taking into account indicator in the US unemployment rate below 5%, the gradual achievement of the inflation target of 2% and accelerating pace of economic growth in the 3rd quarter.

Analytical Group of Report believes, in the case of the growth of interest rates dollar will be strengthened on the global foreign exchange market and the exchange rate dollar/euro will reach 1,08 USD/EUR. It is predicted that the rate of USD/GBP to reach 1,25 and JPY/USD - 105. The growth of the key rate could lead to a drop in the price of gold to 1,250 USD/ounce.

Short-term growth rates will not affect the price of oil due to the expectations of freezing oil production at a summit in Algeria.

According to analysts of Report, increase in discount rate will not impact on positions of Azerbaijani manat.

At the moment, manat exchange rate mainly depends on the amount of foreign currency supply in the auction. In this regard, the growth rate could trigger an increase in demand for the currency at tomorrow's auction. The reduction in weight of manat limits the demand for dollars. 

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