The dollar is trying to cheer up before inflation report

  • And
  • +A

The us currency again in demand after yesterday’s bidding with varying degrees of success. The main factor of support – a sharp escalation of a trade war between the US and China, which again caught the attention of global markets this week. So, after a mutual exchange of threats of additional fees between the two countries, investors show little interest in risky assets, preferring to buy the dollar. However, in “American” is not enough momentum for a more robust recovery.
Despite the fact that the trade dispute remains the focus of markets at the end of the week they will have to be distracted by statistics. In the US the main intrigue is around the inflation report. Market expectations on two more this year raises the stakes high, but in light trade war can leave fears about the consequences of this confrontation for the economy that can affect the forecasts of the rates and attitude of the regulator.
It is therefore important that indicators of consumer inflation didn’t disappoint and showed that, at least at this stage, the economy is not feeling the effect from tariffs, and domestic demand remains healthy, with a further movement of the Central Bank on the path of normalization of monetary policy.
As for the technical picture in the major currency pairs, EURUSD continues to fight for the mark of 1.16, the outcome of which can decide the data on U.S. inflation.
A dip below the interim support 1.1575 will open the way to 1.1550 and below. The pound continues to upgrade to 1-year lows, reaching 1.2840. If in the near future the pair will not find the strength to return above 1.29, the integrity of the 1.28 level would be under threat.
Michael Mashchenko,
Analyst social network for investors
eToro in Russia and the CIS