Dynamics
dollar closed again with a decrease on the basis of volatile trading. At the same time EUR /USD pair has updated a maximum at around 1.4685, the pair GBP /USD, on the contrary, decreased 1.6400, and the pair USD /CHF is trading slightly above the 1.0300 mark.
Japanese yen strengthened slightly against the U.S. dollar, but remains stable against the euro. When the pair USD /JPY fell below a mark of 91.00, and the pair EUR /JPY stays above 133.00.
Commodity currencies strengthened against the U.S. dollar. Thus, the pair AUD /USD once again went to the maximum of 0.8670, the pair NZD /USD approaches 0.7085, the pair USD /CAD has fallen to 1.0700.
Causes
On the eve of favorable data published from the United States, according to which retail sales in August, significantly higher than forecast, the conditions for the productive sector of New York has improved in September, while producer prices rose in August, initially supported the dollar, becoming a sign that the U.S. currency could begin to benefit from positive economic news. But later the situation had returned to the traditional channel, against the backdrop of improved investor sentiment and rising stock indices, investors favored riskier assets, using the dollar as foreign currency borrowing to finance their purchases. LIBOR rate on dollar loans for three months fell to a record low and still lower than the yen and the franc. This situation prevents the growth of U.S. currency in many pairs. Exception was the British pound, which closed weaker against the dollar. Pressure on him had made a statement on the eve of the Bank of England that the Bank considers the possibility of lowering the deposit rates to prevent the accumulation of reserves by banks.
What to expect?
In the overall picture remains the same, and yet the tendency investor s risk is high and the dollar is used as a borrowing currency, it will remain under downward pressure. However, how long this situation is hard to say. It is possible that unexpected data, falling this week, will be able to shake investors' willingness to risk sustained. At the same time, the dollar could still start to benefit from the positive statistics, if it will increase expectations began to rise in interest rates in the United States.
Today in the U.S. is expected publication of a large block of important macroeconomic data, among which will be presented the latest data on consumer price inflation, capital flows, industrial production and balance of payments. It is expected that all indicators will be sufficiently positive, and this fact is more likely to have a downward pressure on the dollar.
In the UK today will present data on the state of the labor market. If the figures will no longer deteriorate, it can support the British currency and prevent its further weakening against the U.S. dollar.
Why worry?
unexpected data may provoke strong and multidirectional vibrations of individual currency pairs.
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