The dollar falls after the fed’s readiness to show patience
The greenback came under pressure after the fed’s readiness to exercise patience in assessing the situation. This was seen as a signal of readiness not only to take a break in promotions, but to complete a cycle of policy tightening. As a result, the demand for the risks went up sharply: the global markets returned to growth and update monthly highs. The pair USDRUB is developing a retreat in the area below 65.40, losing during the day about 70 cents and 14 kopecks since the beginning of the day.
EURRUB feels a little more confidently, trading at 75.26. Per day the loss amounted to 26 cents, plus 2 cents since the beginning of the session.
The softened stance of the fed is directly hurting the dollar, causing participants to overestimate the prospects of interest rates. However, indirectly, these news are also able to support the ruble exchange rate to the Euro. Soft position Backup System supports demand for raw materials and stocks, reducing the thrust of such protective instruments as bonds and safe-haven currency, boosting the demand for emerging market equities, commodities and profitable assets – including RR.
Soon launched a review of the fed’s reaction able to develop a trend in the retreat of the dollar. However, one should not lose sight of that soft of Central banks over the last month (not only the fed but also the ECB, people’s Bank of China, etc) is associated with concerns over prospects for global growth. You should be prepared for the fact that deterioration may again return to the focus of the markets and to reduce the wave of demand for risk.