The dollar again began to rise against most world currencies

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The main theme of yesterday’s us trading session – the next round of the strengthening of the dollar, which is the DXY Index once again crossed the mark of 97, although in recent years he steadily moved in the opposite direction – to the level of 96. The formal cause is the improving data on the U.S. labor market and a slight increase in the inflation prices. If you do not “dig deep”, this combination is a little more unleashes the fed in its ability to not only slightly reduce, but also to raise the key interest rate in the current year.
According to yesterday’s publication of the U.S. Department of labor, the number of Americans applying for unemployment benefits fell to the lowest in 50 years, but the proportion of the working population in the United States – is also minimal approximately for the same time period. As for inflation, in March, producer prices showed the biggest increase in 5 months. However, despite the growth of producer prices, core wholesale inflation was restrained.
Is such a minimal set was enough for American investors seriously believe in the possibility of a further tightening of the monetary policy of the Federal reserve? Very doubtful. Most likely, the main rationale for building “green” world currencies was the inability in the current geopolitical situation and on the eve of the OPEC meeting+ April 17 continue to contain the growth in oil prices (this morning a barrel of Brent traded and gasoline, which has already begun to affect American households.
As an American multinational banks is very simple to strengthen the dollar (much more difficult to loosen it!), it is likely that to reduce the overall recessionary fears they collectively decided to act in such a scenario. Although, of course, such a measure can only be viewed as a temporary “band-aid”, because, as practice shows, perioralna dollar plays against trumpalaike in strict accordance with economic theory. In this case, the workarounds just do not exist.
However, the decline against the dollar during the last day of the Turkish Lira by more than 1%, Kazakh tenge 0.35% and, say, the Mexican peso by 0.15%, the ruble has remained in positive territory at 0.14 percent, which was opened today at 64,60, and for the first half hour of trading slowly adjusted to just 64,58 to the dollar. This uncharacteristic resistance now differ only in three currencies – in fact, the ruble, Indian rupee (+0,26%) and, to a much lesser extent, Brazilian real (+0,05%). This is strong testimony in favor of the continuation of a cyclical recovery of the domestic currency, since the strengthening of the dollar against world currencies is extremely limited by natural causes.
Aside from monetary topics, Federal state statistics service of the Russian Federation in the weekly assessment reported that the rise in the price tags in stores in Russia has slowed significantly, despite held in the beginning of the year increase in VAT and excise increase on gasoline. For the period from 1 to 8 April at the level of consumers ‘ goods rose in price an average of only 0.005% in the day. With the beginning of the month, retail sales were up just 0.04%, while inflation in annual terms has decreased from 5.25% at the end of March to 5.18%. This is significantly below the consensus forecasts and the Central Bank of the Russian Federation in the end of last year, in his circular had announced the pending acceleration of price growth to 5.5-6% in the spring due to the delayed effect of the VAT increase.
__________________________ Vladimir Rojankovski,
LIFA,
The expert “International financial centre”