The US dollar has leapt into the new week, gaining against all major currencies. Its biggest strength has been against the euro and Chinese renminbi, as the markets prepare for another 75 basis point interest rate rise from the Fed’s interest rate committee, the FOMC, on Wednesday.
Other than that, there are housing starts for August tomorrow and existing home sales on Wednesday.
The World Bank warned last week that raising interest rates at so fast a pace will create a global recession. The markets, however, are convinced that central banks including the Federal Reserve will see no other option but to increase or even accelerate rises in their attempts to control inflation. As the FT points out today, the world’s 20 major centra banks have raised interest rates by 860 basis points since June.
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