On Wednesday, the much-awaited markets speech by the American president. Investors were waiting for some signals from him about his future policies and actions in the economy. But nothing significant was sounded, which again led to confusion in the markets and retained the uncertainty factor.
There are still a number of reasons that affect the markets. Local is the publication of statements of companies, which, for example in the States, is generally positive and supports investor interest in purchases. At the same time, there is another negative trend. This is lowering expectations for the positive dynamics of companies in the second quarter, which indicates that they are not so optimistic about the growth prospects of not only the global but also the American economy.
Uncertainty about whether a new trade agreement will be reached between Washington and Beijing also looms over the markets. The advertised meeting of January 30-31 yielded no result. The Minister of Finance, S. Mnuchin, who took part in it, did not say anything concrete, referring to the fact that work is being done and there is still a lot of it to be. All of this indicates that there are no specific agreements yet and that the risk of increasing US trade duties by 10% to 25% on the number of goods from China in the amount of $ 200 billion is still in force. On this wave, the nervousness in the markets remains extremely high.
Europe is in a similar condition. The implications of Brexit are not clear. Britain itself cannot decide on this matter. The European Union is also nervous and, despite the claims that it is ready for the "uncontrolled" exit of Great Britain, tensions exist.
Naturally, this whole picture has an impact on financial markets in general and on currency markets in particular. As a result of Wednesday, the American dollar added markedly in relation to the major currencies, with the exception of the Japanese. We consider its strengthening as local within the framework of uncertainty factors of the possible development of events for the key reasons mentioned above. The overall movement in the market continues in line with the lateral dynamics, which, in our opinion, will continue in the short term.
Forecast of the day:
The currency pair EUR / USD is below the level of 1.1375. We continue to expect it to fall to 1.1320 to the bottom of the short-term uptrend.
The currency pair AUD / USD is trading above the level of 0.7085. We expect it to decline to this level, and after overcoming it fall to 0.7045.
