Baku. 4 August. REPORT.AZ/ US Federal Reserve System (FRS), is expected to increase discount rate in next meeting to be held on September 26-27.
Analytical Group of Report News Agency believes that on Wednesday, August 3, an increase in number of new jobs in the US private sector up to 179 000 units shows sustainable and positive development of the labor market. "The majority of economists surveyed by Bloomberg agency thought that this figure will be 165 000.The figures were significantly higher than forecast and led to the strengthening of the dollar in the foreign exchange market.Thus, the exchange rate of 1.1236 USD/EUR level, declined by 1% and made 1.1125 USD/EUR.
Nation’s benchmark 10-year notes were set a weekly decline as traders braced for the release of the government’s monthly labor statistics, which may add to signs of an improving U.S. economy that could warrant a rate increase by the Federal Reserve this year. U.S. nonfarm payrolls increased by 180,000 in July following a surge of 287,000 in June, according to the median estimate of a Bloomberg survey of economists. Analytical group of Report predicts that in the case of high employment rates forecast dollar will rapidly appreciate.
The strengthening of the dollar will be caused byinterest rates increase by Fed against the background of positive economic indicators.
Notably, on August 3, the president and chief executive officer of the Federal Reserve Bank of Chicago C. Evans said in 2016, the increase in interest rates can be considered suitable for economic conditions.
Fed is aware of increasing lending rates and thus the importance of additional liquidity withdrawal.
The Fed's decision to increase interest rates in financial markets leads to speculative increases in prices.
Although now the global economic growth rate is low, stock indexes close to the maximum level.
Therefore, Analytical Group of Report believes that Fed's decision to increase discount rate in September is quite high. Based on these assumptions USD / EUR exchange rate to reach parity soon.