Dollar peaks at 3-month high as Fed rate hike nears
by Daily Sabah
ISTANBULAug 06, 2015 - 12:00 am GMT+3
by Daily Sabah
Aug 06, 2015 12:00 am
The dollar index reached a 3.5-month high at 98.22, after Federal Reserve Bank of Atlanta President Dennis Lockhart made remarks supporting a Federal Reserve (Fed) interest rate hike in September.
Lockhart said it would only be reasonable to wait for an interest rate increase if the economy deteriorated. Lockhart is one of the members of the Fed who has a voting right in interest rate decisions. Rising expectations that the Fed might start to increase interest rates in September have strengthened the dollar in global markets, and in parallel with this, Turkish lira-dollar parity has exceeded 2.79. The parity, which pursues an upward trend because of the ongoing political uncertainty and operations against the PKK terrorist organization and the Islamic State of Iraq and al-Sham (ISIS), was traded at around 2.77 at the close of domestic markets on Tuesday. After hitting the highest level of the week at 2.7933 yesterday, the dollar decreased to TL 2.7890 during the day. Meanwhile, euro-dollar parity dropped to a two-week low at 1.0849 because of the increasing demand for the dollar in global markets. At the moment, euro-dollar and euro-lira parities are being traded at 1.0869 and 3.0326.
Economists suggest that the international credit rating agency Moody's evaluation of Turkey on Friday and the U.S.'s non-farm payroll data will have a determinative impact on the main course of the markets. They say the 2.80 and 2.81 levels are resistance levels for the dollar-lira exchange rate parity, and they expect that the dollar to fall below TL 2.7650 even after a positive development in Turkey's coalition talks.
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