„In the coming months”

The long awaited speech of the Fed Chair Janet Yellen boosted the expectations for raising the benchmark interest rate in the next months.

Surely this will not happen in June, but she pointed out that the US central bank definitely will lift the rates. Yet the exact time frame is not put.

Yellen pointed out some „sizeable” instabilities encicled the US economy. The NFP data encouraged the thoughts of the central bankers. Also we must face the global development and in particular the UK referendum vote. So the future of the Fed’s monetary policy is tightly related to solvation of these fluctuations.

Following Yellen’s speech US dollar remained stuck around 3-week low. EUR/USD fell 0.08% and was trading lower. The intraday low was reached at 1.325.

USD/CAD dropped with 0.60% and was trading 1.2854. The daily low was hit at 1.2831, which pinned  a 3-week high.

Wall Street closed in green, as mostly profited the financial and energy sector.

S&P 500 closed 0.49% up at 2,109, DJIA finished 0.63% higher at 17,919 and Nasdaq rose with 0.53% to 4,968.

Stong weekly growth

The US dollar continued its strong performance, reaching a weekly high. Greenback managed to erase some of the losses after the Fed's decision last week.

In recent days some members of the US central bank expressed the opinion that the institution needs to look more seriously at the possibility of increasing interest rates. Chicago Fed president Charles Evans said he expects two increases in interest rates this year. Patrick Harker, president of the Philadelphia Fed said on Tuesday that expects three increases by the end of the year.

As a result, the dollar rose against the Japanese yen, reaching a weekly high. USD rose 0.3% to 112.69 yen.

The US currency rose one percent against the Australian and Canadian dollar. Commodity currencies declined along with fall in oil prices.

US dollar index rose by 0.5% to 96,090 points.

Markets rally after ECB meeting

Investors' attention on Thursday was focused on the meeting of the European Central Bank, which would make clear what will be the monetary policy of the Bank in the coming months. The institution reduced by 10 basis points to minus 0.4 interest rates on deposits, a decision that coincided with market expectations. Moreover, the monthly volume of purchases by quantitative easing program was increased from 60 billion to 80 billion Euros. Another important decision that surprised the markets was the reduction of the basic interest rate from 0.05% to 0.00%.

Following the publication of the data the euro fell to 1.0820. During the press conference Mario Draghi said that a further reduction of interest rates on deposits "will not be necessary." This led to a a strong rise of the single currency, as EUR/USD climbed to 1.1217 - a movement of almost four figures.

The dollar index, showing the performance of the greenback fell 1.24 percent to 96.07 after the greenback retreated against most of the currencies included in the basket.

Greenback recorded a good performance against commodity currencies that were under pressure due to the fall in oil prices. The dollar managed to advance against the Canadian dollar by 0.6 percent. The Australian dollar retreated against the dollar by 0.3 percent to 0.7460. Only New Zealand dollar performed well after it managed to rise against the US money by 0.4%.