The single European currency last week showed a negative dynamics. Despite the relatively low market activity, it declined against the US dollar, breaking through the support at 1.1283 and reached the level of 1.1179. Published data showed that consumer price inflation in the Eurozone remains low, keeping thus a high probability of start by the European Central Bank in the near future of additional stimulus measures. This factor, weak statistical data, as well as the risks for the Eurozone connected with possible exit of Great Britain from the EU will soon put pressure on the single currency.
In turn, the US dollar, contrary to expectations, has received support from a "hard" protocol of the last meeting of the Federal Committee on the US FRS open market . It was noted that many members of the Committee do not exclude another rate hike at the next, which is in June meeting. The positive for the dollar were comments of the president of the Federal Reserve Bank of New York William Dudley, who also admitted the possibility of a rate hike at the next meeting. Thus, the long-term uptrend on the dollar may well be resumed, that in a large extent will depend on the upcoming US macroeconomic data.
Last week the British pound is also was in demand , helped by the published data on the UK labor market, that have exceeded analysts' forecasts. However, consumer price inflation in the country remains low, but with it, remains low and expectations of an early increase by the Bank of England of interest rate. In addition, the risks for the pound carries the upcoming referendum, so its growth continue to be used for sales. In the short-term pressure on the pound will remain, but the results of preliminary surveys of Britons and strong economic data will support him, that should be taken into account for IAFT traders. BlogLinks
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