US interest rate goes up

If there is a rise in August I'd be surprised if it was more than .25%. Although the Bank needs to keep the heat out of debt, it will be reluctant to prompt any sharp downturns. Also, the swaps rates, which measure the cost of money for longer term interest rates, have started reducing month on month for the first time in nearly a year.

It's a tricky time for the MPC - it will be interesting to see what happens...
And again today, up another 0.25%.

This hike was widely anticipated in the US financial press.

In a seeming paradox, share prices and gold prices rallied ahead of the hike and stayed up after the announcement.

Another seeming paradox: the DXYO dollar cash index contract, a proxy for the value of the US$ on the foreign exchange market, fell ahead of the announcement and stayed down afterwards.
Forces_Sweetheart said:
Bang goes those fantastic exchange rates......
Not just yet perhaps.

From the Dow Jones Newswire, 26 September 2004:

"LONDON....U.S. President George Bush is being urged to signal a dollar devaluation of up to 20% to rebalance the global economy ahead of Friday's Group of Seven and International Monetary Fund meetings in Washington, the U.K.'s The Business newspaper reported.

"Senior U.S. administration officials in Washington have over the past few days tried to influence the White House and U.S. Treasury to put pressure on the G7 to agree to a dollar depreciation in its final statement, the newspaper said."

It is stated that worry over the soaring U.S. current account deficit inspired this suggestion.

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