IAFT Weekly Economic Review

Pretty boring in terms of movements turned out to be the last week. The main events were the announcement of the results of the meeting of the Committee on Monetary Policy of the Bank of England and the publication of the US labor market data. In anticipation of these events, the US dollar faced pressure from its main competitors, against which the euro has tested resistance at 1.1233, the pound resistance of - 1.3372, and the yen support of — 100.68. Overall, volatility on the currency market remained relatively low, despite a number of important events that have occurred in the recent past, among which are the exit of Great Britain from the EU.

According to the expectations of market participants, the Bank of England decided to lower the interest rate by 0.25%, as well as to expand the volume of asset purchases. At the same time the central bank made a regular decrease of rate by the end of this year and lowered its forecast for the growth rate of the UK economy. As a result, the pound has undergone to sale, collapsed against the US dollar to support in the area of 1.3020. Weekly closing took place slightly above this level, and the continued interest on the sale of a rebound indicates the further risk decline. Long-term prospects for the pound remain negative.

Posted on Wednesday a report on employment in the US private sector from ADP has slightly exceeded the predicted value, but to impress the bulls on the dollar he failed. So from Friday's data on employment in the agricultural sector is not expected any surprises, so the released index at the level of 255 thousand of jobs against the forecasted of 180 thousand. Was a pleasant surprise for them, on what the dollar reacted by rising against major competitors. As a result, the euro/dollar fell to 1.1046, and the dollar/yen rose to 102.06. This week, the dollar can keep a positive attitude, but market activity may remain low, which should be considered by the IAFT traders. BlogLinks

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