Yesterday EUR / USD pair was trading in different directions movin quickly from growth to an active decline, ending the trading day with a result of -0.10%. The mixedm dynamics of entire FOREX market is primarily due to a sharp change in investor attitudes toward the US currency.
Earlier this week, the dollar came under pressure, after the announcement of the positive outcome of the negotiations between United States and China to resolve trade disputes. This decision weakened investor interest in the dollar and significantly increased risk appetite. Yesterday, the situation gradually changed, investors once again get rid of risky assets giving preference to the dollar. The currencies of the developing countries have moved from moderate growth to a decline against the dollar, having given him very strong support. With a decline against the dollar, all G10 currencies are being traded, including the euro. Today, Chinese side has officially confirmed the fact of the start of a new stage of negotiations with the United States, but investors are still showing restrained optimism, since the contradictions between the parties remain quite strong.
Yesterday, the President of the New York FED Williams spoke with a speech in favor of further gradual increase in interest rates while the main economic indicators corresponded to the predicted values of the designated Fed. He noted that the US economy is in very good condition and should continue to grow in the future, creating a good basis for further raising interest rates in the United States. At the same time, inflationary pressure, in his opinion, will remain slightly above the target level of 2%. This speech somewhat changed the views of investors on the possibility of the implementation of monetary policy by the Fed in 2019, supporting the dollar.
There was no important news in Europe yesterday, so investors were quite restrained towards the European currency, which in the medium term remains under pressure from a number of important economic and political factors.
Today in Europe, the focus will be on the speech of ECB head Mario Draghi, scheduled not at 11:30 Moscow time and the publication of the PMI services sector for individual countries and the EU as a whole. In the US, the economic calendar due to national mourning has undergone significant changes. Jerome Powell’s speech at the Congress was postponed indefinitely, and among the remaining events, only the publication of data on the PMI of the services sector and the Beige Book of the Fed can be distinguished