Wheat prices surge nearly three percent after Fed's minutes

Wheat futures rose nearly three percent in American trade as the dollar index fell, according to their inverse relation, which follows earlier developments from the U.S., the world's second biggest wheat exporter, including the release of the Federal Open Market Committee's last meeting minutes.
 
As of 09:49 GMT, wheat futures due on March 16 rose 2.95% to $418.50 a bushel from the opening price of $406.50, with an intraday high at $419.00, and low at $404.75, while the dollar index shed 0.54% to 102.65 from the opening of 103.23.
 
Earlier from the world's largest economy, the Federal Reserve released the minutes of its December 13-14 meeting, at which members of the Federal Open Market Committee voted to increase overnight interest rates by 25 basis points for the first time since December, 2015, when the bank raised them for the first time in a decade from their record zero lows.

Currently, interest rates on federal money range from 0.50% and 0.75%, with expectations of more hikes this year as most members agree that Donald Trump's stimulus plans would increase risks of inflation in the coming period, as Trump has promised to cut taxes and spend more on infrastructure and lessen the regulation on banks, which pushed policymakers to upgrade their forecasts for rate hikes in 2017 to three, compared to two in September.

The minutes revealed that the data released since the November meeting pointed to strong labor performance, while economic activity expanded moderately since the middle of the year, with labor gains being particularly solid in recent months, as the unemployment rate fell, while members pointed to the moderate growth of household spending, but fixed-rate investments were still fragile, as inflationary pressures rose compared to the start of the year.

Members asserted their aim to pave the way for more jobs and to stabilize prices, amid expectations of more expansion for the economic activity and continued growth in the labor sector, and for inflation to rise to 2% in the medium term, as previous price drops in oil and imports are offset, while the labor sector improves further. Short-term risks are considered balanced, while the Committee will keep watching inflation indicators and the global economic and financial developments.