American Economy: 

Last week, while the US is confident on rising interest rates in December, the US dollar was forced by strong downtrends. At September Federal Reserve meeting report showed that Federal Reserve officials are worried about the US inflation outlook. The authorities’ concerns were not unreasonable, and US inflation reports released on Friday were weaker than market forecasts.

Based on the pricing of the future Federal Reserve funds, the chance of rising interest rates at the December is above 80%. While a month ago, the chance to raise interest rates was below 30%. That means the US dollar fundamental position is in a good condition, and the performance of the dollar last week does not really reflect the fundamental condition of the US economy. This week, a lot of economic indices will be released from the United States, but it is not expected to effect on the expectations in market interest rates

However, the Fed’s Beige’s report may have an effect on expectations. If the report, which is a complete assessment of the US economy, reflects the weakness of inflationary pressures, market expectations of exchange rates will be weakened. In that case, we can say the Federal Reserve’s concerns about the situation of inflation are serious.

This week, important officials from the Federal Reserve will speak, most notably is the speech of the President of the Federal Reserve Janet Yellen. She explicitly announced that she was seeking to eliminate monetary stimulus policies. She is expected to reaffirm this view and support the December increase in interest rates. Federal Reserve chiefs will also speak. Dudley, the head of the Federal Reserve of New York and Williams, the head of Federal Reserve of San Francisco will also speak. In recent speeches, these two important Federal Reserve officials have emphasized the prevention of a rapid rate growth of inflation, while both believe that instead of waiting for inflation to reach 2 percent, it is better to facilitate the way in order to inflation reach to 2 percent.

Janet Yellen attended the G-30 summit with the heads of central banks of China, Japan, and Europe. The meeting ends today. In the middle of the week, Dudley will speak. If the US Federal Reserve does not emphasize on the rise in interest rates in December and the recent weak economic reports be worrying for the authorities, and the authorities will acknowledge that anything can happen in the remaining 6 weeks, the dollar will fall.