June'17 is likely to witness the next US rate hike: Angel Broking

Views of Mr. Prathamesh Mallya (Chief Analyst- Non-Agri Commodities & Currencies, Angel Commodities Broking):

"In the latest policy meeting dated 3rd May'17, the US Federal Reserve kept the interest rates unchanged and said that it expects the world's largest economy i.e. the United States of America to start growing at a faster pace. Janet Yellen who is the US Fed Chairwoman spoke about three things - inflation, employment and GDP. She said that markets should ignore the monthly figures and instead should concentrate on the larger picture which clearly shows the robust state of labour sector.

About inflation, she said that the rate (excluding energy and food) was running close to Fed's 2 percent longer-run objective and is expected to stabilize at the target levels over the medium term. The recent softness in the economic activities was transitory in nature which clearly meant that two more rate hikes would be on its way this year. According to the CME Group's FedWatch Tool, traders are now pricing in a 72 percent chance of a June rate hike, from 63 percent before the Fed's statement. After the release of the hawkish FOMC statement, the market sentiments improved which boosted the demand for the American currency. Asian markets, on the flipside, are trading in red as a rate hike in the US will prompt the traders/investors to park funds in dollar denominated assets."

Source : Equity Bulls

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