Baku. 13 December. REPORT.AZ/ After a two-day meeting starting today US Federal Reserve System (Fed) will announce its decision on interest rates on December 14.
Analytical Group of Report believes apart from decision on interest rates, statements by Fed may affect dollar rate in global currency market. " There are 3 main scenarios which can affect US dollar exchange rate."
In the first scenario, if Fed raises discount rate without giving any statement about future plans, the dollar may fall.
So, strengthening of dollar in recent months against most currencies, will force investors to realize future Interests.
In the second scenario, even if Fed increases discount rate, it may be pointed out to the long-term break.
In other words, if Janet Yellen will say interest rate hikes are related to economic indicators dollar may fall more rapidly than in the first scenario.
According to the third scenario, along with the increase of interest rates if J. Yellen will express positive opinions about prospects of the US economy and concerns about increase in inflation rate and drop a hint about raising discount rate then USD / EUR exchange rate will drop below 1.05 and reach parity.
Currently, the Fed meeting is expected to be completed in the first scenario. If so, the volatility in financial markets will slow down and Fed will be able to make decisions after monitoring economic indicators. The Fed is unlikely to make any decision at the next meeting, however, the second meeting which will take place in March 2017 will be very important. If new president of the United States will implement his views on fiscal spending and raising taxes, the US government will be forced to raise interest rates. In this case, the dollar is likely to strengthen and increase interest rate more aggressively.