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Dollar Rises, Markets Dip

World markets down as investors predict interest rate hikes

By Rob Quinn, Newser Staff

Posted Dec 17, 2009 4:28 AM CST

(Newser) – The dollar climbed to a three-month high today on rosier-than-expected Fed economic predictions while markets fell on expectations that central banks will soon begin to raise interest rates. The greenback gained against 15 of 16 of its most commonly traded currencies, while major European and Asian stock indices were down 1% or less. The Fed said yesterday the US economy is gathering steam and detailed plans to start winding down its extraordinary lending measure next year, AP reports.

[Images (1)]

[Quotes (1)]

A South Korean bank clerk works next to bundles of US dollars at the head office of Korea Exchange Bank in downtown Seoul. (AP Photo/ Lee Jin-man)

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The Fed’s statement indicated jobs data won’t get worse from now on, providing some level of confidence for the US dollar. - Susumu Kato, chief economist
at Calyon Securities in Tokyo

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Dollar Rises, Markets Dip