After the US Labor Department reported last week that new private sector jobs hit 280,000 in the month of May, the US Dollar edged to a 13-year peak versus the Japanese Yen. Today, the Dollar is under some selling pressure after a media outlet reported that the US President allegedly commented that the rising US Dollar posed a problem for the US economy. In fact, several Federal Reserve Bank officials have made similar statements over the past several months, noting that the appreciating greenback negatively impacted growth and exports.
As reported at 9:08 am (BDT) in London, the USD/JPY was trading at 125.15 Yen, a loss of 0.4%; last Friday, the pair hit 125.86 Yen. The EUR/USD is trading higher at $1.1125, a gain of 0.25% while the GBP/USD was flirting with the day’s low of $1.5226, moving away from the session peak of $1.5306.
Speculation Grows for a Fed Rate Hike
Despite the comments made by politicians, FX traders continue to hold out high expectations that the Federal Reserve will move to raise interest rates, possibly even in September, and that there will be sufficient economic evidence to support such a move. A recently conducted poll shows that top banking firms in the US believe rates will rise in September with likely a second rate hike before the year’s end. William Dudley, the president of the New York branch of the Federal Reserve, said last Friday that he does believe the Fed will be ready for a rate hike soon despite his own concerns about the US labor market.