Forex: Fed Plosser’s speech hawkish on rate hike

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After the Philadelphia Federal Reserve Bank President Charles Plosser announced today that the Fed will have to tighten monetary policy to prevent a rise in inflation the Dollar was given an immediate boost against the Euro. His speech referred to consumer spending increasing at a steady pace and that the labor market is getting better, implying that the overall US economy is on the right track for strong growth.

All eyes are now on the release of Non-Farm Payrolls March figures scheduled for April 1st. This is a key indicator and is especially important for foreign exchange markets since they give a good indication of where US interest rates will go. If the data is strong, that would give the Fed more reason to raise rates.

The EURUSD declined to hit a US session low of 1.4057 after dipping from the New York open price of 1.4159.