European stocks fell during Wednesday’s trading. To some extent, they reflected Tuesday’s development on the New York Stock Exchange. But investors’ bet on a further rise in interest rates in the US, where the central bank’s monetary policy meeting is approaching, has also become apparent.
The Fed will continue to fight inflation
The Federal Reserve will decide on the change in interest rates at the traditional two-day meeting on September 20 and 21, less than two weeks from now. In recent days and weeks, there have been statements from his ranks whose authors have made it clear that the central bank is determined to fight inflation.
These statements are gradually coming into the expectations of financial markets, where investors are counting on further interest rate increases. One manifestation is the rising value of the US dollar against other world currencies.
Japanese Yen Loses Against Dollar
And at the moment, the Japanese yen is paying the price for such a development. It hit the weakest level in two years against the U.S. dollar during Wednesday’s trading. In the past 12 months alone, the dollar has been more than 30 percent stronger against the yen. The yen is approaching the 147 yen per dollar exchange rate, where it was last in August 1998.
