Although the Memorial Day was celebrated in the United States yesterday, the dollar was able to unexpectedly strengthen its position in the absence of American traders. Everybody is shouting about the fact that the matter is in Austria and Italy, which have begun to stir up the water. Thus, in Austria, a political scandal continues, hyped by the German media due to the fact that the former Vice-Chancellor promised to support allegedly Russian entrepreneurs. It came to the point that the parliament passed a vote of no confidence in the government and the chancellor. Although the Chancellor himself even earlier announced the dissolution of the ruling coalition, which already implies going to early elections. Italy, on the other hand, continues to be afraid of exceeding the permissible level of budget deficit this time, in order to reduce the unemployment rate from 10.2% to 5.0%. If Italy goes to such a serious crime against the will of Germany, then penalties will be imposed on it, and it also threatens to worsen the situation with the servicing of public debt, which carries a threat to the entire euro area. And although these reasons look quite logical and pretty, they do not give an answer to the most interesting question - why did the pound weaken more than the single European currency?
Apparently, we are witnessing a gradual realization that Brexit will be fun and festive, that is, without any deal, with unpredictable consequences. The fact that this is not good for the economy of the United Kingdom is obvious. But for the European Union, the outcome is quite difficult to predict. Yes, Jean-Claude Juncker beat his heel many times on his chest and swore on blood that Europe had already prepared for this parade of all the armed forces. Like, they took such a bunch of regulations that there would be no negative consequences. However, these are just words, and how it will be in practice, the question is quite interesting. So while in the UK, they are engaged in such a fascinating business as the selection of a new prime minister from among the eurosceptics, investors gradually come to understand that little will change from this, and everything goes according to the worst case scenario. Especially if the new prime minister will be Boris Johnson, who openly advocates Brexit without a divorce agreement.
Although no one is resting today, the macroeconomic calendar is practically empty. Thus, we can pay attention to data on consumer lending in Europe. The growth rate of which should accelerate from 3.2% to 3.3%. On the other side of the Atlantic, S & P / Case-Shiller data on housing prices are published. The growth rates of which can slow down from 3.0% to 2.8%. But the data itself is not so important, and the maximum that they can do is to somewhat hold back the negative due to the risk of an uncontrolled Brexit.
The euro / dollar currency pair shows a recovery after a sharp rise, where the quotation went down again to the level of 1.1180. It can be probably assume amplitude fluctuations within this value, with the amendment of 20-30 points.
The currency pair pound/dollar after the corrective movement, went into the recovery phase, rolling back to the limit of 1.2680 which probably suggest a temporary stagnation in the range of 1.2660 / 1.2700.
