Interest Rate Steady based on Trump’s Economic strategies
Fed Keeps Interest Rate Steady waiting for the clarity on Trump’s Economic strategies
The financial market is expecting the United States Federal Service to ensure the interest rates will not change on Wednesday. The decision was made from the time Donald Trump became the president of America. The idea was supported by the central bank which remains still until it clarifies on the issues of economic policies.
Euro Spiked when Trump’s trade adviser asserted that Germany is applying the “Highly undervalued” currency. The adviser argued that Germany is on the line to use the undervalued currency to achieve a better position than the US and EU partners. It was confirmed by Peter Navarro, who outlined that euro was similar to an “implicit Deutsche Mark” whose small value allowed Germany to perform better than other major partners. He stated that Germany proceeds to exploit different EU and US countries with undervalued Deutsche Mark. After the comments, the Euro advanced attaining a five-day high of $1.0764 and knocked the dollar index down 0.4 percent.
Dollar Heads for Worst
The dollar has 1 percent down over the Yen after the announcement by Trump to stop travelers from seven Muslim countries entering the US. For that reason, most of the affect people called for a protest in the US and other parts of the world. This creates uncertainty in US trade markets thus affecting the value of the dollars. The dollar has shown a consistent fall since mid-December. The issue has shaken some people to move out of the market due to a high level of doubt on the new administration.
Sterling ADVANCES IN 2017
Some of the currency experts have noted the expected growth rate of sterling in 2017. The experts postulated the coming back of the British pound especially in foreign exchange market. Though the currency was had a tough period last year, Aurelija Augulyte declared that this year it would strengthen accordingly. The ongoing Brexit issue weakened the British pound. The leading elements for exports and production are performing well in the market and this may influence the coming back of the GBP.
China is trying to create attention on the need to create a global currency that can perform well for the existing dollar. The proposal came after Gov. Zhou Xiaochuan realized the problem associated with the economic crisis in the world. The suggestion emphasized on the need to develop and international currency that will be controlled by the international monetary funds. It was commented that common currency would help in stabilizing the weakening economic and financial sector in the world. The currency will serve a better in pricing commodities and trading activities. Notably, most of the institutions and countries have a large share of the usage of the dollar. However, the America’s economic issues can affect different nation using dollars in trade markets. Therefore, to maintain a steady value of currency, it is good to develop a common currency that will not be affected by the economic condition of one country. Zhou emphasized the IMF should find out a better way to create and acceptable reserve currency that is applicable in the whole world.