On Wednesday morning, the main currency pair is stabilizing after yesterday’s decline; the market is still in anticipation of the British referendum.
The EUR/USD is growing slowly on Wednesday morning. The current quote for the pair is 1.1255 as it added 0.05%. Yesterday’s low for the instrument was 1.1240.
Janet Yellen’s comments made yesterday, which look rather neutral, managed to catalyze movements on the currency market. According to Yellen’s words, the FOMC not only monitors the current parameters of the employment market, the inflation, and the GDP very carefully, but analyzes the perspectives as well. Making her speech before the Banking Committee under the U.S. Senate, the monetary politician said that there were risks on the part of the United Kingdom because of Brexit and concerns relating to China and its priorities.
Well, in case of the British referendum everything is clear, more-or-less – only one day left until the popular vote – but the situation with China is not very plain and simple. Obviously, China is moving away from the export-oriented economic model, and right now it’s rather vaguely whether such heavy economy as the Chinese one is able to reverse.
Usually, everything relating to China activities – no matter whether its GDP increases or diversifies – troubles the USA. The Asian partner is difficult to predict, but the same can be said about the USA as well. Global economies fulfill their domestic purposes in the first place, and only after that pay attention to consequences for others. It’s normal.
The FOMC will be very careful in its estimations ad monetary actions, said Yellen and made investors very happy for some reason. One cannot be too careful of course, but in this case her words may indicate that the interest rate will be increased only once in 2016, but not twice as many expect. One should be very careful about reactions. Domestic demand shortage may turn out to be a stronger barrier for the FOMC’s decisive moves than meets the eye.
RoboForex Analytical Department
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