The United States dollar increased against other major currencies on Friday as Federal Reserve Chair Janet Yellen said the central bank was on track to raise interest rate this year and the country’s economic growth was revised up again.
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Strong earnings from Nike lifted the <strong>Dowstrong> Friday, while weakness in many tech names pushed the <strong>Nasdaqstrong> lower as a morning rally in USA <strong>stocksstrong> fizzled. Nike was up 9% to $125.13 a share.
Also helping to boost the Greenback and weaken the EUR/USD, GBP/USD and gold was an upward revision of second-quarter GDP which was influenced by stronger consumer spending and construction.
In a speech late Thursday, a week after the Fed delayed a long-anticipated rate hike, Yellen said she and other USA central bank policymakers do not expect recent global economic and financial market developments to significantly affect policy.
Federal Reserve Chair Janet Yellen on Thursday reiterated that she expects 2015 to be the year of the rate hike during a speech at the University of Massachusetts’ Amherst campus. The S&P 500 rose 16.01 points, or 0.83 percent, to 1,948.25.
In December 2008, in the early days of the recession, the Fed cut its benchmark short-term interest rate to almost zero and has kept it there since.
THE QUOTE: “A gradually increasing rate environment is a positive, because it sends a signal … that the U.S.is on a good, if not great, recovery to growth”, said Scott Keifer, global investment specialist at JPMorgan private bank. Experts said the relatively low level of layoffs was a sign of a healthy job market.
Gold futures gained about 0.6 percent for the week.
EUROPE’S DAY: France’s CAC 40 jumped 3.1 percent, while Germany’s DAX climbed 2.8 percent. That sparked declines in U.S. equities in five out of six sessions leading up to Ms Yellen’s speech.
The Australian dollar decreased to $0.7019 from $0.7036. They are pricing in about a 47 percent chance of a hike in December, and a roughly 56 percent probability of liftoff in January.
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Pier 1 Imports slumped 17.4 percent to an nearly 5-year low of $7.21 after the home decor and furniture importer’s results missed expectations. Silver was down 0.3 per cent at $15.12 an ounce, while platinum dipped 1.18 per cent at $951.25 an ounce.
