According to published last week data, economic growth in the first quarter of the USA reached 1.1%, exceeding, thus, predictive and previous values. However, these data were able to impress investors, especially that consumer spending remain low, as well as personal income. In general, these data had little impact on the dynamics of the US dollar, which last week was under slight pressure from the euro and the Japanese yen.
After the referendum in the UK, as a result of which, the country will not to be a member of the European Union, a further tightening of monetary policy by the US Federal Reserve was under a big question. The head of the Federal Reserve Janet Yellen in her comments confirmed the absence of haste in raising interest rate, which is also lowered expectations of market participants regarding the event. Thus enthusiasm for dollar purchases, in particular for euro, despite the Brexit, is not there, but at this moment, euro/dollar is in a consolidation phase, and the prospects for the pair remain negative.
While the euro gets some support thanks to the current account surplus, the British Pound prospects look much gloomier. Although the British actively protest against the country's exit from the EU, the chance to cancel the results of the referendum are quite low. Moreover, in his comments the head of the Bank of England has admitted lowering of interest rate in the foreseeable future.On the background of these factors, the pound will continue to decline, but IAFT traders should closely monitor what is happening in the UK, since politicians can still find ways to save the country's membership in the EU, and then we will see a large-scale getting rid of short positions in the pound. BlogLinks
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