The dollar was unable to keep strengthening. Overview for 11.02.2016
11.02.2016
On Thursday afternoon, the main currency pair is trading in the middle, although the euro has managed to win back yesterday's losses.
The night before, the US currency strengthened sharply against the euro, reaching a level of 1.1160 after comments from the head of the Federal Reserve Janet Yellen with respect to monetary policy prospects. Today, the volatility in the main currency pair has leveled off, the instrument is trading steadily, the current price is 1.1301.
So, the head of the American regulator last night once again confirmed that a series of raising interest rates by the Fed will be smooth and gradual, and it will move with the state of the economy. This time Yellen drew attention not only to their own economic system, but also mentioned the impact of monetary approaches of Europe and Japan. It is very interesting - before the Fed almost never looked back and did only what suited its fiscal interests.
There was another unusual thing. The mention of inflation as a risk factor for the US economy has disappeared from the Fed's comments two months prior to the rate increase. Yesterday Yellen spoke about low CPI levels, explained them with cheap oil and the value of imports, and said that in the near future inflationary pressures will remain insignificant. Now, it turns out that the Fed again officially accounts for low inflation in decision-making on interest rates - in recent years of macroeconomic factors only the employment market appeared, which has strengthened the long-term positive trend.
Back in December, it was clear that the Fed will in no case rush to increase rates later. The December rate increase happened including pressure from the business lobby. Macroeconomic grounds for the rapid growth of the rate are no longer in play, and the dollar is back in a weak position.
RoboForex Analytical Department
The night before, the US currency strengthened sharply against the euro, reaching a level of 1.1160 after comments from the head of the Federal Reserve Janet Yellen with respect to monetary policy prospects. Today, the volatility in the main currency pair has leveled off, the instrument is trading steadily, the current price is 1.1301.
So, the head of the American regulator last night once again confirmed that a series of raising interest rates by the Fed will be smooth and gradual, and it will move with the state of the economy. This time Yellen drew attention not only to their own economic system, but also mentioned the impact of monetary approaches of Europe and Japan. It is very interesting - before the Fed almost never looked back and did only what suited its fiscal interests.
There was another unusual thing. The mention of inflation as a risk factor for the US economy has disappeared from the Fed's comments two months prior to the rate increase. Yesterday Yellen spoke about low CPI levels, explained them with cheap oil and the value of imports, and said that in the near future inflationary pressures will remain insignificant. Now, it turns out that the Fed again officially accounts for low inflation in decision-making on interest rates - in recent years of macroeconomic factors only the employment market appeared, which has strengthened the long-term positive trend.
Back in December, it was clear that the Fed will in no case rush to increase rates later. The December rate increase happened including pressure from the business lobby. Macroeconomic grounds for the rapid growth of the rate are no longer in play, and the dollar is back in a weak position.
RoboForex Analytical Department
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Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.