US not interested in dollar strengthening

Baku. 2 February. REPORT.AZ/ Federal Reserve (Fed), after its 2-day meeting, noted the inflation as main condition to increase interest rate. 

Report informs referring to Bloomberg, in her statement on results of the meeting, Fed Chairwoman Janet Yellen expressed her satisfaction with development in employment market, creation of new jobs, boosting trust in the economy, but noted that inflation is still under targeted 2 %. Despite her earlier statement indicating necessity of raising interest rate to slow the inflation, yesterday she talked about importance of reaching inflation target. She didn’t mention rising oil prices and expected customs duties for import as possible factors to boost inflation. As a result, US dollar lost ground against other currencies. But US private sector report featuring 246,000 newly created jobs delayed the process. Thus, the announced figure is significantly above predicted 165,000 new jobs.

Report’s expert group believes, last statements by Fed chairwoman, as well as US president and his advisor for cheaper US dollar, reveal current exchange rate as relevant. Thus, this statements thwart dollar’s rising trend pushed by expectations of interest rate increase. It means that even in conditions of interest rate above 2.5%, significant drop of USD/EUR rate below parity is not desirable. Expert group predicts the US dollar will keep on the same level in relation to other currencies in next two years, with further strengthening in later period.