The Fed's decision to leave the interest rates following the meeting was expected, but a positive assessment of the state of the economy and the announcement that the regulator plans two more increases this year supported the dollar rate.
In general, the final document was full of good assessments of the state of the country's economy. And for this, there are grounds, the latest data on GDP, the labor market, figures from ADP, which precede the official from the Ministry of Labor, and the persistence of inflationary pressures, as reported by the price index for personal consumption (RFE), which was presented earlier this week, are positive and constitute, in our opinion, a strong basis for the growth of the US dollar or at least for its stabilization in relation to the major currencies, which is now observed.
As a result of Wednesday, the rate of the American currency has increased, but still remains in the ranges relative to the major currencies. Today, its local strengthening continues against the major currencies with the exception of the Japanese yen, which became a "victim" of the statement of the deputy governor of the Bank of Japan, M. Amamiya, who reported that "the target level of long-term profitability remains about zero percent." Earlier, following the meeting of the Central Bank of Japan, a signal was given by the Central Bank executives that the yield of 10-year government bonds could be raised to 0.2%, which was regarded by the markets as negative for the yen. The inconsistency of statements made by the Central Bank leads to uncertainty surrounding the outlook for the yen.
Today, an important event will be the result of the meeting of the Bank of England. It is assumed that the key interest rate will be increased by 0.25%, to 0.75%. This probability is already taken into account in quotes, therefore, as it seems to us, investors will closely follow the rhetoric of the speaker at the press conference M. Carney. If he makes it clear that this is not a single rate hike in the future, we should expect a strong appreciation of the British currency, but if the regulator's communique and his manager's speech do not signal any of these prospects, the pound may be under considerable pressure.
Forecast of the day:
The currency pair EUR / USD is trading lower on the wave of the Fed meeting, which supported the dollar. Crossing at the price of mark 1.1640 opens a couple of way for further fall to 1.1585.
The currency pair GBP / USD is trading above the 1.3085 level. If this mark is overcome, we can expect the pair to fall to 1.3000.
