The USD remains solid. Overview for 16.08.2021

EURUSD is keeping its balance; market players are sympathetic towards the “greenback”. 

Early in another week of August, EURUSD is keeping its balance. The current quote for the instrument is 1.1780.

A preliminary report on the Consumer Sentiment from the University of Michigan published last Friday showed 70.2 points in August after being 81.2 points the month before, although it wasn’t expected to change at all. This was some terrible news for the USD, however, the major currency pair was oversold for a very short period of time and managed to keep balance.  

The actual reading of the indicator is the lowest since 2011. Such a significant drop may be connected to people’s economic insecurity. The components of the report were quite depressing: the Current Conditions dropped from 84.5 to 77.9 points, while the Consumer Expectations went from 79.0 to 65.2 points. 

At the same time, the Inflation Expectations also got worse: 4.6% against 4.7%. The 5 Year Inflation Expectations is 3.0% after being 2.8% earlier. 

Based on these indicators, investors sort of postponed their expectations of an early reduction of the US Fed stimulus. However, one should admit that these forecasts contain too many emotions, which continue ruling the market and make it volatile.