November 7, 2015
International markets experiencing a state of increased demand for the US dollar, due to the expectations of sweeping international currency market to raise the prospect of the US Federal Reserve interest rates next month.
The greenback registered a significant increase has not been achieved weeks ago, the yield on the US short-term bonds rose to the highest level in four years, come these developments after he said the US Federal Council province Janet Yellen that there is a possibility of a rate hike next month in light of "the decline risk "that can infect the US economy due to the ongoing developments in the global economy.
The dollar rose to its highest level in three months against a basket of major currencies yesterday, and increased the dollar index, which tracks the movements of the dollar against six major currencies, was 0.15% at 98.135 after rising 0.8% the day before yesterday.
And break the dollar range of 120-121.60 yen, which has been moving the recently rising to the highest level in two months at 121.85 yen, and with the promises of the European Central Bank to provide more stimulus in its fiscal policy, the euro fell to its lowest level in more than three months at $ 1.0834 while the British pound steadied against the dollar at $ 1.5390 but rose against the euro to its highest level in 11 weeks.
Some analysts believe that the high value of the dollar against other international currencies, or raise US interest rates will have no effect and one course in the global economy, with repercussions that will vary on different economies.
Dr. Ridley Reading economics professor in Comparative London School of Economics, believes that the high value of the dollar will negatively impact on the US trade balance, but it will enhance the economic potential of the European economy and may contribute to some degree in the output of the euro zone from the current economic recession.
Reading and said, "It is for the countries of the European Union and specifically the euro zone, the high value of the dollar will translate in reduced demand for American exports, it will allow a better chance to competitors traditional American exports to control the largest share of the market, then, that their goods - a resident of the euro - will be relatively cheaper than American-made goods, as for emerging economies it is difficult at this time profit and loss account which would suffer from the rising value of the dollar. "
He adds that the "rise the dollar means increased demand for emerging economies, exports of goods and services because it would be less expensive resident in dollars, but also will increase the value of the foreign debt burdens, and then can not put imagine boycotted for real what will happen to the emerging economies due to the dollar high at the moment."
Dr. Helen Bell Professor of International Trade at the University of Leeds is considered that the oil economies will be the biggest beneficiary of the rise in the US dollar, and pointed out that the decline in oil prices by more than 50 per cent during the year to leave a negative impact on public budgets in most if not all oil economies and hit those budgets helpless, and forced some governments to sell foreign assets and government bonds or withdrawal of international reserves to bridge the current deficit, but the high price of the dollar or US interest rates, may improve the relative position of financial oil economies resident of goods and services.
He adds Bell, that "most of the oil countries to invest in the US economy and retain most of the financial reserves in the form of deposits dollar both in central banks or abroad, whether in the form of fixed assets or government bonds or bank deposits, mostly in dollars, then the rise in the US currency value makes up a relatively of losses resulting from the decline in oil prices during the year. "
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