The dollar sets the tone for currency trading
Despite the quiet trading foreign stocks, the ruble has been weakening, losing 40 cents to the dollar to 62.76 and 49 kopecks to the Euro to 76.41.
Some improvement in demand in the equity markets Thursday morning, as well as the likely technical rebound after the dollar rally, as well as the growth of oil do not help the Russian currency, which significantly retreats to the reduction of yield spread between dollar and ruble bonds.
The U.S. currency on Wednesday continued their strong attack on the global currency market, gaining 0.5% index USDX. From 17 April, the index has added 2% and send the dollar to the highs from January. The strengthening is due to a rise in interest rates, making dollar purchases of debt securities more attractive compared to counterparts from Europe and Japan.
The EURUSD fell yesterday in the second half of the day below 1.22, touching on the lows of the day levels 1.216, which has not happened since mid-January.
US stocks once again found support on approach to the 200-day average. As a result, major indices managed to show a slight strengthening after Wednesday, but futures are still slightly (+0.2%) was added at the start of trading Thursday. Thus, the stock markets of the USA could not yet cross the line, which is a signal for serious sale.
For the Euro, this “line in the sand” is still quite remote and is close to 1.20. To maintain or reverse the downward momentum of the single currency capable of today’s ECB meeting.
The ECB meeting often creates a surge of volatility, and this is a very likely outcome this time. Very long the Euro is trading sideways, coming now to an important support line. The sharp market reaction is able to produce as demolition of this consolidation and the beginning of a downward trend with a target at 1.15-1.17, and rebound to the top of the range 1.24-1.25.