Minutes released yesterday from the Federal Reserve meeting on November 1-2, 2016 signaled that an interest rate hike is highly likely before the end of the year. The minutes revealed that voting members of the Fed saw that the “near-term risks to the economic outlook were roughly balanced.” Though 17 members of the Fed attended the meeting only 10 had voting power. Fed Chair Janet Yellen noted last week in her testimony to congress that Trump’s victory did not change the Fed’s plans for a rate hike in the coming weeks. Confirming the Fed’s expectation for a rate hike next month were other reports out on Wednesday which showed that consumer sentiment increased in November and that new orders of U.S. manufactured goods rose in October.
A Response to the Reports
The dollar rose 0.1 percent in Thursday’s Asian session to 113.650 yen, though it was down from an eight-month high overnight. The euro shed 0.1 percent to trade at $1.0543, up slightly after hitting eleven-month lows overnight. The euro has lost nearly 4 percent this month. Foreign stocks continued to struggle with the high dollar, with Hong Kong’s Hang Seng dropping 0.2 percent and the MSCI index falling 0.4 percent on Thursday. Oil prices remained flat during Thursday’s Asian session.
U.S. markets will be closed today for the Thanksgiving holiday and thin trading volumes are expected during the European session in response to the holiday.