Dollar is keeping rising on Forex

USD

EURUSD

EURUSD is losing 2.5 figures the second week in a row. The US dollar was continuously growing against currency basket during 10 last days. It’s hard to find a period when the US dollar was growing so constantly, though the movement scope is rather far from the historical maximum swing. But such movements hide inside the biggest danger. The USD demand, during 2008 crisis, was caused by the liquidity issues, so it was solved comparably simple through supply of the USD liquidity. And now, the dollar is increasing due to the fundamental reasons – on the expectations of tougher monetary policy in the USA during the coming month as well as on forecasting that the economic stimulus of Trump’s team would arise pro-inflationary mood, making the Fed to increase the rate more actively. In other words, America will not turn into Japan. Surely, it is quite early to make such long-term conclusions, but the mood on the markets has slightly improved. On the dollar demand wave the pair, EURUSD, has dropped to the lows area since last December. Moreover, though the pair was below 1.06 many times during last year, it spent there quite little time, since serious players, probably, were protecting the pair from the decline below the parity. The movement towards 1 or lower will be almost inevitable, in case it may fix below 1.05. On Friday it managed to fell to 1.0570. If we add remaining divergence in the monetary policies of the ECB and the Fed Reserve, will have the following possible scenario. EURUSD experienced a strong decline impulse, therefore it may move to the short phase of consolidation or correction near to the current level and, probably, after the attempt to reach 1.05. Further, with more power, it may make another more successful than in 2015 attempt to take key support, with the possible targets around or below the parity.

eurusddaily

GBPUSD

Pound lost as well during last week but not so significantly as other majors against the USD. Nevertheless, GBPUSD fixed last week lower than the lows of the previous week, and before the support level of the uptrend was broken. May the released strong retail sales data not to disorient you. Sales splash happened after collapse of the pound. This is the purchasing, made before the goods become more expensive, which means the coming months will show significant decrease of this indicator. Such situations we have observed before both in Britain and Russia, after the Ruble’s collapse at the end of 2014.

gbpusdh4

USDJPY

USDJPY gained almost eight figures for two weeks, at some point getting above 110.90 on Friday. The Bank of Japan, dissatisfied by the short-term country’s bonds yield increase, started to buy short-term equities. A month ago many analysts described the course of yield curve targeting as policy strengthening, but the situation changed, so this buying now is putting extra pressure to short-term bonds yield by Bank of Japan. Technically, the Bank of Japan returned the pair to growth way. It is not surprising, if the pair moves back to the area above 120-125 by the middle of the next year.

usdjpyweekly

NZDUSD

New Zealand experienced a major earthquake, which as well damaged the National statistics building. They started news releases only on Friday and they will continue with delays. It is still unclear if the Royal Bank of New Zealand is going to lose the policy in order to help its economy or it may cause a new wave of houses price growing and lead the RBNZ to implement policy tightening. The first scenario is more probable.

nzdusddaily

Trump hangs over Dollar

Donald J. Trump

EURUSD

Last week the US dollar was under pressure as the news appeared: Trump is cutting his lagging from Clinton. The perspectives of winning by this representative of the Republicans cause the market fever and strengthen the attractiveness of the safe-haven assets. Hence, EURUSD got the double push: caused by deleverage on financial markets and due to the common weakness of the American currency. Continue reading

Expectations are the first and foremost

Waiting

EURUSD

The influence of strong indicators of the labor market from the USA, issued on previous week, did not keep for a long time. On Tuesday, markets again tended to sell dollar. Eventually, by Friday the pair EURUSD reached 1.1250, getting back to the local lows of August. The released statistics calls our attention to the decline of labor efficiency in the USA and the simultaneous increase in expenses for the workforce. That is the evidence of hiring new employees by the companies. The efficiency grows when they fire people and replace them by programs. Continue reading

Dollar returned to an important support

USA

EURUSD

Fed Reserve comment on monetary policy has evoked volatility splash but eventually did not bring any significant shifts in a trend since the pair continued its smooth growth along the trend from the beginning of the week. As a whole the comment could support American currency since it excluded any concerns about global finances, but was mentioned that income growth would support inflation and bring it closer to its target in a medium-term. Continue reading

Aussie retreated before dollar

Australia

EURUSD

The pair continues to grow but its pace looks more like creeping. Yesterday the pair managed to accelerate and reached 1.1340 but it returned to its main trend by the end of the day, having dropped below 1.13. Now again the trades are going on above that line, while investors are not in a rush to extremely stress statistics from Europe before FOMC comments on monetary policy. But here they should pay attention to more than expected indicators from Germany. Continue reading