On Tuesday, the foreign exchange market did not demonstrate an unambiguous dynamics. As before, the influence of multidirectional forces both supports and exerts pressure on the US dollar rate.
On the whole, the dollar remains in favor in the wake of the apparent divergence of the interest rate differential between the Fed and all central banks, whose currencies are the main ones. The dynamics of the ICE dollar index actually remains lateral for six months, which indicates the lack of clear and unambiguous drivers for the growth of the US currency. These include the continuation of the Fed's desire to further raise interest rates, their existing differential in favor of the dollar, as well as its function of a safe haven currency against the background of a high uncertainty factor in the world due to trade wars. And although the States managed to crush Mexico and Canada, having won the dispute, there are still Europe and China. The EU has partially surrendered to the victor's mercy, but the PRC is still opposing, and how it will all end is not yet clear.
Negative for him remains a complex domestic political situation in the United States. The likelihood of D. Trump's impeachment, if he loses the mid-term congressional elections, holds back not only the upward dynamics of the US stock market, but also the dollar. In general, there is a tangle of contradictions, which leads to the fact that investors are cautious in making decisions in the markets.
Today, the attention of the markets will be focused on the publication of these indices of business activity in the services sector of the Eurozone, Germany, Great Britain, and the USA. It is assumed that the German indicator and the eurozone indicator will show the preservation of the growth rate in September of 56.3 and 54.7 points, respectively. At the same time, the British index should be adjusted to 54.0 points from 54.3 points, as well as the American one, to 58.1 points from 58.5 points.
The focus will be more on the publication of data on employment in the private sector from the company ADP. The number of new jobs is expected to increase to 187,000 in September against an increase of 163,000 in August.
We do not expect the market to respond vigorously to data from ADP and figures from indices of business activity indexes in the services sector. Most likely, the overall dynamics of market consolidation before the publication of official data from the US Department of Labor will continue this Friday.
Forecast of the day:
The currency pair AUD / USD is trading above the level of 0.7165. A decline below this mark may be the reason for the price to fall to 0.7130, and then to 0.7100.
The currency pair USD / JPY is trading below the level of 113.85. The persistence of the tension factor in the world, as well as, probably, weak statistics from the United States may push the pair to decline to 113.00.
