In anticipation of the publication of important data on the US labor market, which could shed some light on prospects for increasin by the US Federal Reserve of interest rate this year, to be exact - on the rate of increase, the US dollar last week, remained under pressure. Commentary from the head of the Federal Reserve Janet Yellen lowered expectations of rate increase during the year, which had a negative impact on its dynamics. On this background, the euro all week confidently grew against the dollar, breaking the previous high and testing the resistance in the area of 1.1438.
Published data have shown growth of in the US unemployment rate up to 5.0% vs. 4.9% and growth of employment in non-agricultural sector up to 215 ths. people vs. 205 ths. Besides, have exceeded the forecasted value and the data on the average hourly wage. The US dollar reacted to the statistics with the growth against some of its competitors, but, as should be expected, its growth did not last long, as they do not change their expectations maximum of two increases FRS rate. Its representatives have repeatedly stated that in order to accelerate the pace of monetary policy tightening only the positive dynamics of the labor market is not enough.
Thus, the euro ended the week near the 14th figure, and the dollar/ yen - below 112 th. Despite the recovery of stock indexes, the demand for the Japanese yen remains, and a weekly closure below 112.00 increases the risks of testing and breaking of the lows at 110.66. Passage of this support and the psychological level of 110.00 will lead to a reduction to the area of the 108th figure. However, the differential of policies of the FRS and the Bank of Japan, as well as the positive dynamics of stock indexes, forcing with the high caution sell the pair at current levels or lower. Besides, look risky and the purchases of the euro/dollar at current levels, which, IAFT traders should pay attention to. BlogLinks
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