The US Federal Reserve: Its likely to reduce the pace of raising interest rates in the coming period
The Chairman of the Federal Reserve said that it is likely to reduce the pace of raising interest rates in the coming period, with the improvement in the battle against inflation.
Jerome Powell said in his speech yesterday that the Federal Reserve is in a position to reduce the pace of interest increases soon.
Powell said that policy moves such as raising interest rates and reducing bond holdings take time to show their effects in the economy.
He added, “It is logical that we reduce the pace of rate hikes as we approach the level needed to control inflation, and the time may come to adjust the pace of rate hikes in the December session”.
Market participants now largely expect the US central bank at its next meeting in December to raise interest rates by 50 basis points.
As a result, the markets turned upside down, and the compass reversed, especially with regard to gold and the dollar, while oil returned to record some gains after remarkable losses it recorded recently.
At its height, spot contracts for gold / US dollars jumped during Thursday’s trading, by more than $ 14, or 0.8%, to reach levels near $ 1783 an ounce during these moments.
On the other hand, futures contracts for the yellow metal rose by more than 2.1%, or the equivalent of $38 an ounce, during these moments of today’s trading, to approach $1,800 levels.
On the other hand, from gold’s strong rises, the dollar took a new step back, to fall near its lowest level in more than 3 months, down to 105.48 points.
The dollar index fell during these moments of Thursday’s trading, to levels of 105.4 points, a decline of 0.45%, reaching its lowest level since the beginning of last August.
The dollar also fell to a three-month low against the yen; Investors focused on the statements of the Chairman of the Federal Reserve (the US Central Bank) about the possibility of slowing the pace of raising interest rates early.
The relationship between the dollar and the yen is very sensitive to any changes in long-term US Treasury bond yields, which fell after Powell’s remarks, approaching their lowest levels in two months at 3.6%. The yield in the latest transactions in Tokyo was 3.6163%.
The euro rose 0.39% to $1.04485, reversing the trend towards a five-month high of $1.0497 that it hit earlier in the week.
The pound rose 0.36% to $1.2102, close to the three-month high it hit last week at $1.2153.
