2 mins read
The primary currency pair is consolidating on Thursday following yesterday’s failure. The current EURUSD exchange rate stands at 1.0743.
Yesterday’s signals, including the release of March’s inflation statistics and the minutes of the Federal Reserve’s previous meeting, provided massive support for the US dollar.
The consumer price index in the US rose by 0.4% m/m and 3.8% y/y last month, exceeding previous readings. The index was expected to decline by 0.3% m/m. Core inflation remained at 3.8% y/y.
The Federal Reserve interest rate forecasts were immediately adjusted, factoring in the statistics. The market now expects the first step towards reducing borrowing costs to be taken in September. The likelihood of a rate cut in June decreased to 18%, while a few days ago, it was over 50%. Everyone fears that the Federal Reserve will be too strict in assessing an uptick in inflation and will take more time for observations.
The released Federal Reserve meeting minutes already reflect all the above. Monetary policymakers appeared concerned about inflation, considering it high.
To summarise, a delay in easing the Federal Reserve’s monetary policy supports the US dollar position and works against the euro.
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.
Source: http://www.roboforex.com
