The US dollar has not stopped growing for the fourth consecutive week

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Dollar gains for a fourth week in a row. During this time he managed to send the Euro to fresh lows the end of 2017, the pound – for levels, Jan and update 3-month highs versus the yen. The main driver of the demand for “American” returned to the markets the theme of divergence in monetary policy. Amid rising inflation expectations prospects for the four rate hikes again in the centre of market speculation.
But it is not only the fed, which actually has so far refrained from more clearly hawkish promises, but also with other key Central Banks. In the Eurozone and UK economic statistics have started to deteriorate rapidly, which did not allow Bank of England to raise rates at this meeting, although in early April, almost no one doubted that the cost of credit will be increased in may. The regulator noted that it would take a wait and ponablyudat for fresh economic data, before thinking about further normalization of policy.
The ECB, meanwhile, can think about the slow collapse of incentives due to low inflation and a sharp decline in business activity in the region. The Bank of Japan the more distant from the normalization and have even refused to time of achieving the target level of consumer prices. So, in the foreseeable future and even in the medium term, the collapse of incentive measures in Japan should be expected.
Against this background, the dollar really looks like a winner, especially given the increase in the yield of treasuries. By the way, yesterday the yield of 10-year securities again exceeded the level of 3%, heated rally of the dollar. In the short term we do not exclude small development of the current correction of the us currency, but from a fundamental point of view, it is expected the development of a bullish trend.
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Michael Mashchenko,
Analyst social network for investors
eToro in Russia and the CIS