The main currency pair is gaining weight after the July meeting of the USA FOMC.
The Euro is getting more expensive on Thursday, thus continuing the ascending movement started yesterday. The current quote for the pair is 1.1090.
Yesterday, the two-day meeting of the FOMC was over. It was unproductive for capital markets as the interest rate remained the same, 0.25-0.50%. Investors were waiting for any indications or even hints at the time when the rate would be revised for increase, but unfortunately, Janet Yellen never commented on this. This time, Yellen’s overall tone was more “hawkish” as she spoke more specifically and strictly in comparison with the previous meeting. She mentioned the employment market recovery in the USA in June after the May’s collapse as a positive moment, indicated external risks, and emphasized that the regulator continued its monetary policy approved earlier. It’s good, but it’s not what market players wanted to hear.
Expectations of the interest rate revision are now postponed until early 2017. Only very optimistic people may expect the revision this year. However, now there are much fewer talks about QE4.
Today’s statistics showed that the Economic Sentiment index in the Eurozone in July increased up to 104.6 points against 104.4 the month before and the expected number of 103.7 points. The indicator is some kind of “thermometer” that shows business and consumer sentiments, so its positive value may have a great influence. The PMI in the service industry in the Eurozone increased up to 11.1 points against 10.9 points the month before in the midst of the demand improvement. Maybe, it’s partially due to the holiday season, or it’s a natural result. Sentiments in the industrial sector improved as well, although the indicator is still negative here.
It is thought that the market “euphoria” may yet continue for a while, but not for too long, because later investors will remember European countries that have problems with debts, and will once again move towards “safe haven” assets.
RoboForex Analytical Department
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